A subsidiary company of the Employees Provident Fund (EPF), recently purchased a hotel in Melaka for RM110 million, said an opposition member of Parliament today.

Sigmaprise Sdn Bhd, a wholly owned subsidiary of Malaysia Building Society Berhad (MBSB) in which EPF has a 62 percent stake through equity and loans, has entered into an agreement with Westmount Leisure Sdn Bhd to acquire from it The Golden Legacy Hotel.

PAS MP for Kubang Kerian, Husam Musa revealed the transaction to reporters at the Parliament lobby today.

He added that the Kuala Lumpur Stock Exchange (KLSE) general announcement on April 23 issued by Mat Rashid Yeop, MBSB group company secretary, stated that the rational of the transaction was to "enhance MBSB's activities".

"The aggregate value of the consideration is tentatively fixed at RM110 million. The purchase consideration is based on the loan balance due from the vendor as of March 31, 2001, after waiving away 50 percent of the penalty on the interest due," read the announcement.

"The nett book value of the hotel as per the vendor's latest audited accounts on Dec 31, 2000 was RM112 million. There will be no impact on MBSB's share capital and shareholders' and there were no liabilities to be assumed arising from the transaction," it added.

However, Husam urged the finance ministry to investigate the matter as MBSB has been incurring substantial losses.

He said in 1999, MBSB made losses of about RM294 million; a year later it lost RM80 million.

"The company's total assets have decreased from RM5 billion in 1999 to RM2.4 billion in 2000," said Husam.

"The company's reserves have also depleted from RM756 million in 1998 to RM439 million in 2000," he added.

Husam said he had raised this issue in Parliament last Wednesday while debating the EPF (amendment) Bill 2001 but Deputy Finance Minister Chan Kong Choy denied the acquisition took place.

Today, the MP met with Chan at the lobby and handed over a copy of the general announcement to the latter who promised to act on it.