THE government has defended the RM5 billion injection into fund management company ValueCap through a loan from the Employees' Provident Fund (EPF), saying the company has performed well despite an outstanding RM5.1 billion debt.

Finance Minister Datuk Seri Najib Razak said: "The shareholders are happy with the company's performance and they've had some returns in the past. They will decide what is the best way to handle it (debt)."

He said the government was "quite happy" with Valuecap's progress since its investment portfolio had appreciated, adding that the company would help shore up investors' confidence.

Najib was responding to questions about the RM5.1 billion debt first reported by the Malaysian Insider website.

The online news portal reported that the debt, due to mature in February 2006 but later extended to February 2009, was taken in March 2003 by ValueCap from shareholders Khazanah Nasional, Kumpulan Wang Amanah Pencen and Permodalan Nasional Bhd to invest in the stock market.
Yesterday, Lim Kit Siang (DAP-Ipoh Timur), at a press conference at the Parliament lobby, said the RM5 billion loan from EPF was a zero-impact move as the injection would be used to pay off the outstanding debt.

On another matter, Najib refuted opposition claims that he had tabled a new budget.

"This is not a new budget because the development and operating procedures are still the same. What is happening is that because there is a shift from the reduced fuel prices, the savings enabled us to use it for projects which will benefit the people."



Najib said the RM7 billion subsidy savings was based on oil prices of US$70 (RM247) per barrel.