With reference to the article in The Star dated January 4, 2007 entitled ' Rotten Deal' ,  the Employees Provident Fund (EPF) wishes to clarify that the investment was approved by the Investment Panel subject to a full financial and legal due diligence audit being done.

The report, and in particular the headline, is inaccurate and does not represent the actual position of the proposed investment. The initial study done by the Private Equity Department showed that the proposed investment was viable with good business prospects.

However, the EPF did not proceed with the deal because the company concerned was wound up. Action is being taken to recover the refundable deposit.

The EPF has an investment strategy to guide its investment portfolio while complying with legal requirements as to where it can park its funds. As custodian of 11 million members' retirement fund, stringent procedures and guidelines are in place to ensure that all investment transactions are carried out in the most effective and transparent manner.

(NIK AFFENDI JAAFAR)
Senior Manager
Public Relations
Employees Provident Fund

Date: 4 January 2007