KUALA LUMPUR: A recent investment in Jakarta exposed weaknesses in the Retirement Fund, Inc (KWAP) investment process as it relied too heavily on international trends, says Datuk Seri Anwar Ibrahim.
The Prime Minister said the investment highlighted the need to tighten safeguards when investing public funds, despite due diligence and stringent investment committee procedures.
"I found that the due diligence and investment committee processes before proposals are brought to the board are structured and stringent.
"However, I believe the recent investment in Jakarta exposed a major weakness, as they merely followed international trends.
"I acknowledge that this was a weakness in the process. I accept the reminder that, when safeguarding public funds entrusted to us, we must introduce even stricter procedures," he said during Prime Minister’s Question Time in the Dewan Rakyat on Tuesday (Oct 20).
In a supplementary question, Datuk Seri Dr Ronald Kiandee (PN-Beluran) asked about the measures the government was taking to identify those responsible for KWAP's substantial losses.
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Anwar said KWAP had also placed confidence in SoftBank, believing that the company would not make a careless investment.
However, the outcome showed that relying on the judgment of international institutions and agencies, including those from Japan and Europe, did not necessarily guarantee that an investment was sound.
He said the government would tighten regulations to ensure that public funds entrusted to KWAP were managed responsibly.
"We cannot simply follow international trends. We must also ensure accountability in our decisions.
"However, we must not overlook KWAP’s overall performance, which has recorded substantial profits and recently achieved a new record.
"That is evident, but we must also acknowledge the shortcomings," he said.
It was reported earlier this year that KWAP suffered a loss of about RM200mil in Indonesian aquaculture technology company eFishery.
