MoF considers statutory bodies’ mandate before approving investments – Amir Hamzah

KUALA LUMPUR: The Ministry of Finance (MoF) takes into account the mandate for establishing statutory bodies, their investment risk management and investment expertise when considering the types of investments they are permitted to make.

Finance Minister II Datuk Seri Amir Hamzah Azizan said several statutory bodies have set a requirement to refer to MoF for investment approval.

He said that the federal statutory bodies with government-linked investment company (GLIC) status, including the Employees Provident Fund, the Retirement Fund Inc (KWAP) and Lembaga Tabung Haji, have a founding mandate with core investment activities and a team of officers with expertise in managing investment portfolios.

“Therefore, GLICs are generally allowed to invest in a broad range of investment classes including options, private equity and overseas investments,” he said during a question-and-answer session in Parliament today.

He was replying to a question from Wong Shu Qi (PH-Kluang) who wanted to know whether the federal statutory bodies and non-statutory bodies were allowed to invest in options, private equity and foreign exchange.

Nevertheless, Amir Hamzah said, there were associated risk controls and governance to reduce the risk of investment losses.

For instance, he said, KWAP requires MoF’s approval in appointing investment panel members and to make investments in assets such as buildings and private equity. The ministry also limits the percentage of investments that can be made abroad.

“For GLICs with the expertise, they focus on investments that can bring high returns such as equities, money markets, debentures and securities,” he said.

Meanwhile, answering a supplementary question from Datuk Ku Abd Rahman Ku Ismail (PN-Kubang Pasu) who asked about the ministry’s readiness to enact new or amend existing acts to regulate the governance of statutory bodies under the ministry, Amir Hamzah said MoF is always monitoring current trends if improvements are needed.

“We will try to discuss how to improve and what is important. In the investment panels, we place people who are capable in relation to investments made by the company. We hope that those who have the fiduciary duty will carry out their duties well,” he added. – BK