"It's not part of the Consolidated Fund. It's a loan from EPF," said Najib.
The Deputy Prime Minister pointed out that the loan would not be part of the Budget 2009 allocations for spending announced last month.
Really, this is too much. While I'm certain that the so-called loan from EPF will be guaranteed in full by the Malaysian government (together with KLIBOR++ interest, I should hope), I cannot help asking again and again, Is this RM5 billion for main saham really necesary?
A few questions need to be answered by Najib:
1. Will the RM5 billion be used to buy ONLY shares of GLCs?
2. Is the move intended to prop up and window-dress the financial results of Khazanah Nasional?
3. Please explain the multiplier effect that this move will have on Bursa and/or the real economy.
4. How is the EPF loan secured?
5. What are the default clauses to be put into the EPF loan?
6. Will there be a formal loan document?
7. Will the loan document be made public, since ALL non-government employed Malaysians are stakeholders of EPF?
8. When will the loan be repaid?
9. Will there be any interest payable on the loan? If so, how is the interest calculated?
I'm sure there will be more questions by everyone else. For more on Valuecap, see my earlier post Calendaritis there are many informative links there.
UPDATE: Read also this report in The Edge Financial Daily. But do take the initial paragraphs containing the views of fund managers with a huge shovelful of salt since they have a vested interest in seeing more market activity. It is a RM5 billion question whether it is safe to enter the shark-infested cesspool of the stock markets, not just in KL but anywhere.
FURTHER UPDATE: MOF II, Nor Yakcop made a statement that EPF will make a profit from the RM5 billion that it is to lend to Valuecap. But have a look at the the view offered by blogger, MYOP 101, on the returns to Valuecap since 2003.