EPF pares KPJ Healthcare stake ahead of president exit, shares tumble

The Employees Provident Fund (EPF) recently sold over eight million shares in KPJ Healthcare Bhd in two blocks, just one day before the private hospital group announced the departure of its president and managing director, Chin Keat Chyuan, effective September 1. This move occurred ahead of a significant sell-off in KPJ shares following the post-market announcement about Chin's resignation.

Despite closing slightly lower at RM3.12 that day, KPJ shares plummeted 10.26 per cent, or 32 sen, to RM2.80 upon the resumption of trading on Monday. The decline intensified the following day, with the stock falling 10 sen, or 3.57 per cent, to RM2.70 after a holiday closure for Maulidur Rasul. Since last Friday, KPJ has shed 43 sen, or 13.74 per cent, from its market value, amounting to approximately RM1.88 billion.

In a recent Bursa Malaysia filing, KPJ disclosed that EPF traded a total of 8.55 million shares across two transactions totaling 4.42 million and 4.13 million shares. The exact transaction value remains undisclosed. Based on KPJ's closing price of RM3.13 on August 20, the shares would have been worth around RM26.76 million. It remains uncertain whether EPF continued to reduce its stake on August 21, as the latest disclosure only includes transactions from August 20.

The retirement fund has been steadily reducing its stake this month, with its current holding at 18.55 per cent, down from 20.18 per cent at the end of July. This follows a period of accumulation and portfolio rebalancing that had increased EPF's shareholding from 13.21 per cent in January. Currently, EPF is the second-largest shareholder in KPJ, trailing state-controlled Johor Corporation, which owns a 43.38 per cent stake.

Chin, who assumed the role of president and managing director in September 2023, is set to leave after three years in the position. Professor Datuk Dr Hanafiah Harunarashid has been appointed as officer-in-charge pending the appointment of Chin's successor. KPJ chairman Tan Sri Dr Ismail Bakar stated that the board has put the necessary leadership arrangements in place to ensure a smooth and orderly transition, emphasizing that the group's strategic direction remains unchanged. He affirmed that KPJ remains on a strong footing and will continue focusing on executing its plans.