Najib’s appointee in EPF board has conflict of interest

Top Glove have denied that its chairman Tan Sri Lim Wee Chai was a political appointee to the Employees Provident Fund (EPF) Board.

In an email to NMT, Top Glove denied various impugnment made in our article published on November 13, (click here to read it).

Top Glove may have denied many things but the company did not deny our impugnment that Lim had been a supporter of former prime minister and world-famous alleged kleptocrat, Datuk Seri Najib Razak prior to the 14th General Election (GE14).

NMT have responded by asking Top Glove, EPF and the Finance Ministry for a copy of the letter of appointment of Lim as a Board Member of EPF, however we have yet to receive any reply.

We hope that by making that letter public, we can further scrutinize any potential conflict of interest between Lim being a Board Member of EPF, and EPF being one of Top Glove’s largest institutional investors.

We certainly MUST know the content of the appointment letter to clear his name as Najib’s political appointee at EPF. Lim’s own Wikipedia page which we believe is updated by his own PR or Corporate team, clearly stated that Lim was reappointed as a Board Member of EPF for 2017-2019 by the Ministry of Finance. No prize for guessing that the Minister of Finance at the time was Najib.

We also hope that no one from Top Glove or Lim’s associates would amend that Wikipedia page to delete the part about being reappointed by the Ministry of Finance just like it was done for the info about Lim being appointed Council Member of the National Science Council (March 2017 to March 2019) in his capacity as FMM President, by the Prime Minister of Malaysia. (Najib)

Yes, that part about him being appointed Council Member of the National Science Council by Najib had been deleted. We can only assume that he doesn’t want that ‘association’ which he seemed to be proud of, prior to GE14.

Top Glove is now seem to want to disassociate Lim with Najib. Lim has been seen to be ‘cosy-ing’ up to the new Pakatan Harapan leaders.

Minority shareholders question conflict of interest

We believe scrutinizing such potential conflict is crucial in these so-called New Malaysia. Our concern that there may be conflict of interest with Lim being a Board Member at it’s own institutional investorm especially EPF who are the trustee for Malaysian workers, seems to be shared by the Minority Shareholders Watch Group (MSWG).

The MSWG released a Message From CEO in the Weekly Newsletter dated November 16, 2018 (here). The message started with “The concept of ‘conflict of interest’ is premised on one of the limbs of natural justice… ‘no man shall sit in judgement of his own course’ (Nemo judex in causa sua in Latin).”

So for Top Glove to suggest that it’s chairman is clear of any conflict of interest in this case, is very much sitting in the judgement of their own course.

“When it comes to ‘conflict of interest’, it is equally important to avoid both actual and perceived ‘conflict of interests’. This is because perception shapes reality and sometimes, that very perception becomes the reality.” according to MSWG CEO’s message.

This supports NMT’s suggestion that Lim’s appointment to the EPF Board was a clear conflict of interest.

“It is a conflict of interest when directors of Public Listed Companies (PLCs) sit on boards (or committees) of institutional investors, who in turn have shareholdings in the said PLC, from which that Board member comes from.”

“It does not matter whether that Board member can influence the institutional investors’ dealings decisions when it comes to the said PLC’s shares. It is the perception that matters.

“Of course, that director can abstain from the institutional investors’ deliberations when discussions are held pertaining to that PLC. But surely, it is much better to completely avoid ‘conflicts of interest’, whether real or perceived, by not accepting any board positions in institutional investors who have interests in their PLC.”

Influence on share price, EPF investment decisions

“Where a director of a PLC sits on the board of an institutional investor, and the institutional investor in turn deals in the shares of the said PLC, minority shareholders are often left wondering whether the share price of the PLC is due to actual market forces, (price discovery), or due to the investment/divestment decisions of the institutional investor.

“Such wonderings are especially pronounced if that PLC enjoys richer valuations, for example, in terms of higher PE ratios, compared with the PLC’s competitors.

“Will there be no conflict of interest if the institutional investor does not invest in the shares of the said director’s PLC? To some extent perhaps, but not completely. The said director may influence his competitors share prices through the institutional investor’s share dealing decisions.

“Therefore, it is especially crucial for a director to avoid such directorships at institutional investors where the institutional investor also holds shares in the director’s PLC.

“In such instances, the conflict of interest becomes so much more obvious and real and breaches the fundamentals of natural justice (nemo judex in causa sua) absolutely.”

Top Glove yet to respond to Minority Shareholders Watch Group’s message

The MWSG CEO’s message above did not specify who it was referring to. However, with the release of the message just a few days after NMT’s article was published, suggests that it is referring to Lim being on EPF Board.

NMT have also asked Top Glove for a response to the MSWG CEO’s message, and more importantly about the concern of conflict of interest that the Watch Group have mentioned. But there has been none forthcoming.

It’s probably worth noting here that in Top Glove’s email to NMT, they demanded that we take down our article on every platform. However, they did not request for any public apology or retraction announcement. We wonder why?

-Mujahidin Zulkiffli