Saturday, June 2, 2012

Is there anything wrong if EPF's CIO trades the same stock for himself and you?

After the findings of FELDA directorship and shareholdings, I looked through Annual Reports of MRCB, a company where Dato Shahril Ridza is a director and EPF acts as the controlling shareholder. I found out something which to me is not right and worrying. Acting as the Chief Investment Officer (CIO) of EPF and director of MRCB, he trades on both sides - which means as an individual shareholder of MRCB and CIO of EPF, he trades MRCB stocks for himself and EPF. See below where I have summarised his holdings from MRCB's Annual Report.
EPF is the controlling shareholder of MRCB.
Notice that from the chart below when he purchased shares of MRCB on his personal capacity, MRCB's share performance was at its low and he started to sell down, the shares of MRCB was at its high.


This is not an attempt to attack any person, however I feel that as the CIO who is in charge of more than RM470 billion (one of the most powerful person in the world in terms of money management), he should not hold any shares that EPF invests into. It is important for a person who holds such a position to have strong discipline in what he is doing especially how fund owners perceive him to be. Already, the ever growing EPF fund is holding more than 35% of its total fund in equity - and it is growing. As the CIO of EPF, he is representing all working Malaysians in terms of our retirement funds. The misnomer of trading MRCB shares on his personal capacity while double acting as the leading investment officer of the largest fund in Malaysia is just plain wrong.

I do not hold any trust funds, as I am one who does thorough checking on anything I own whenever I decide on having it especially investments, however with EPF I have no choice - and to see this is saddening. Frankly, I am sickened by it.

Related article:
Reply from the Deputy CEO / CIO of EPF

1 comment:

Benson said...

Nothing in this world is 100% fair, even he is nt trading by himself, he can share those ideas to another party, a game of big sharks indeed.