KUALA LUMPUR, May 18 — If there is a conflict of interest between Bank Negara Malaysia (BNM) and the Retirement Fund Inc (KWAP) on the KWAP investment panel, then the same can also be said for the Finance Ministry that governs these institutions, a DAP MP said today in the Parliament.

Responding to the ministry’s reply that BNM’s withdrawal from KWAP investment panel was due to conflict of interest between the regulator and the fund, Petaling Jaya Utara MP Tony Pua said the argument did not make sense as these agencies belong to the government.

“If BNM steps down from KWAP panel...they are also on the KWSP panel. Will the government then create another law to ask them to step down from KWSP?” Pua said during the debate for amendments of Retirement Fund Act 2007, using the Malay initials for the Employees Provident Fund (EPF).

“If BNM sits on these government agencies, there should be little conflict,” the opposition MP added.

He also pointed out that the current KWAP chairman, Tan Sri Mohd Irwan Serigar Abdullah, is also the ministry’s Secretary General of Treasury.

“If he is KWAP chairman, would not his position also create conflict of interest? This does not make sense then,” Pua added.

Fellow Pakatan Rakyat (PR) ally and PKR’s Rafizi Ramli also expressed similar concerns last month on the amendments proposed then for the act, claiming the changes will effectively impede BNM oversight on the management of the civil servants’ pension fund.

The PKR secretary-general said a provision in the amendment requires the Finance Minister to replace BNM’s representative with four others of his choice is an attempt to loosen the public fund’s governance and regulation.

KWAP is Malaysia’s second-largest pension fund behind the EPF, which is a compulsory retirement fund for private sector workers.

The civil service pension fund recently came under fire by opposition lawmakers over a RM4 billion government-guaranteed loan to SRC International Sdn Bhd, a former subsidiary of debt-laden 1 Malaysia Development Berhad (1MDB).