KUALA LUMPUR: PAS MP Dzulkefly Ahmad urged the Civil Service Pensions Fund (KWAP) to make come clean on details over its purchase of MAS’ perpetual bond for RM1.5 billion.
Speaking at a press confence at Parliament today, Dzulkefly said KWAP should make the details available to the public as it was the custodian of pensioners’ money.
Yesterday, MAS told a press conference that KWAP had purchased its perpetual bonds, known as junior sukuk, to help the ailing carrier to raise funds.
The bonds, also known as “perps”, will pay a rate of 6.9% and is not rated.
Dzulkefly, who is Kuala Selangor MP, said the perpetual bonds do not have a government guarantee attached to it.
“For these bonds, the issuer will only pay dividends as when they can pay them,” he said.
In the event MAS declares bankruptcy, Dzulkefly said that KWAP would be the last to receive compensation as the perpetual bonds are listed as junior sukuk.
“KWAP will be the least of MAS’ priority if it goes bankrupt. Remember, MAS is suffering from losses for many years,” he said.
On related matter, DAP MP Tony Pua said that the perpetual bonds are even riskier than junk bonds due to their low priority in terms of repayment.
“In fact, both Monetary Authority of Singapore and Thailand Securities and Exchange Commission deem this bonds to be worthy of warnings,” said Pua.
Although he understood that MAS needed financial help, Pua said he was surprised that the people’s hard-earned money was used to invest in the bail-out exercise.
“If MAS fails to pay off its debts, the government will be forced to conduct another mega bailout to save the current financial rescue effort,” he said.FMT