KWAP ‘in the dark’ over Uber investigation, says CEO

Uber was reported to be looking into a corporate donation made to govt- backed MaGIC

By NG MIN SHEN / Pic By AFIF ABD HALIM

Retirement Fund Inc (KWAP) said it has no knowledge of the alleged quid pro quo dealings between the federal government and US-based Uber Technologies Inc, in which it has invested US$30 million (RM124 million).

Uber, which is facing a US federal probe into whether its employees violated US bribery laws in its operations across five Asian countries, has been reported to be looking into a corporate donation made to the Malaysian Global Innovation & Creativity Centre (MaGIC).

A Bloomberg report last Wednesday said Uber’s lawyers are investigating the donation — said to be of tens of thousands of dollars — which was announced in August 2016.

The following month, KWAP pumped US$30 million into Uber. This was the government-owned public pension fund’s first direct investment in a foreign company.

Allegations have been made on the possibility of these developments being a quid pro quo deal that could have led to the federal government passing national ride-hailing laws in July 2017 — under a year after the financial arrangements were made.

KWAP CEO Datuk Wan Kamaruzaman Wan Ahmad said the inquiry was “something we don’t know” as it presently does not involve the fund.

“The investigation is on Uber’s side. We’re still trying to get more information on the matter. We’re still in the dark, there are no details. For us, we’re very clear that everything was done with proper board approvals,” he told The Malaysian Reserve (TMR) recently.

MaGIC has denied its links to the matter, saying “we strongly refute our involvement in any quid pro quo arrangements”.

The government-backed agency created to support entrepreneurs — particularly technology startups — said it regularly collaborates with corporates by offering platforms and initiatives to connect them with local leading entrepreneurs.

MaGIC is chaired by Treasury Secretary General Tan Sri Dr Mohd Irwan Serigar Abdullah, who is also chairman of KWAP.

KWAP invested into Uber last year as part of its foray into non-conventional assets. The country’s second-largest pension fund with assets of RM133 billion as at end-May 2017 has been looking to diversify into new sectors as the scale of the fund grows.

Some 90% of its investments are in traditional assets like fixed income and equity, while the remaining 10% is in alternative investments such as private equity.

KWAP has since raised the non-traditional investment allocation to 14%, which it hopes to achieve in the next three years and will comprise private equity, property and infrastructure investments.

In March this year, Wan Kamaruzaman told TMR the fund does not intend to divest its investment in Uber, although the company was already in a woeful state then.

“Uber is not a listed company and as such, we are not able to get our investment out that easily. Our investment in Uber is small and we still see value in it for the long term — KWAP values its investments over the long run and not in the short term,” he said.

He believes Uber’s problems are temporary setbacks and the negative press surrounding the company is not expected to affect its future value.

The investigation into Uber’s possible violations of the Foreign Corrupt Practices Act 1977 also covers suspicious activity in China, India, Indonesia and South Korea, including allegations of bribing Indonesian police in Jakarta late last year and possession of an India rape victim’s medical records in 2015.

The ride-sharing company is also facing a US probe on the use of its software to deceive law enforcement officials.

There appears to be no end to Uber’s internal turmoil and operational setbacks in various parts of the world, which range from accusations of sexist practices to claims of stolen trade secrets, and crashes of selfdriving cars to losses of US$645 million in the second quarter of 2017.

The company is now helmed by former Expedia CEO Dara Khosrowshahi and his first major challenge will be to Transport for London (TFL) move to stop the company operating in the English capital, after TFL ruled that Uber is not a “fit and proper” private car hire operator partly due to its safety record and a failure to report “serious criminal offences” by its fleet of unlicensed drivers.