WHEN Malaysia voted in a new government on May 9, many probably did not vote to see a change in government-linked investment companies (GLICs) such as Khazanah Nasional Bhd and Permodalan Nasional Bhd (PNB).
It is generally known that the appointees to the boards of Khazanah and PNB persons heading the investment arm of the government are supposed to be apolitical.
They are more focused on managing the wealth of the country and meeting the social objectives of the Government such as helping to distribute such wealth.
They take instructions from the Prime Minister leading the government of the day – a practice that started during Tun Dr Mahathir Mohamad’s earlier tenure as Prime Minister.
After a meeting among board members on Tuesday, Khazanah managing director Tan Sri Azman Mokhtar handed in his undated resignation letter to the Government.
What stunned Putrajaya and even some of the closest top officials within Pakatan Harapan was the undated resignation letter from all the other board members of Khazanah as well.
Among those on the board of Khazanah were the likes of Tan Sri Mohd Nor Mohd Yusof, a close ally of Dr Mahathir.
Parti Bersatu council member Wan Saiful Wan Jan was also surprised by the move, which he described as having a “hint of protest”.
Some even speculated that there was a pied piper at work leading the entire board to offer their resignation en bloc.
But for those following the developments between Khazanah Nasional, Dr Mahathir and the Council of Eminent Persons led by Tun Daim Zainuddin, the latest move was about the only thing that the board could do in the absence of direction from the new government.
The board members did not need anybody to tell them that the options were limited since the shareholder was silent on the future direction of Khazanah.
It is learnt that Khazanah Nasional Bhd’s managing director Tan Sri Azman Mokhtar had been trying to meet up with Dr Mahathir on issues related to Khazanah. But he was unable to see the Prime Minister, who instead made several disparaging statements criticising Khazanah.
Dr Mahathir said Khazanah had deviated from its original objectives and that its executives were overpaid. He also said Khazanah was supposed to hold the shares for Bumiputera temporarily, but was instead holding the equity on a long-term basis.
As for Daim, he has said that the success of companies under Khazanah was largely due to the Government as its shareholder and consequently, the executives did not deserve high salaries.
Such statements do not help the Khazanah board undertake its duties. The board meets every quarter where it takes instructions from its shareholder, who is the chairman.
When a new chairman is not appointed, the board is left rudderless. There are no instructions coming and it becomes ineffective, leaving only whispers that the new government wants to see some personalities resign.
That is the Malaysian culture. Nobody is told to leave, but they are left guessing.
The Khazanah board comprises members who have earned their stripes in the corporate sector. The last thing they want to see happen is them being blamed for the sovereign wealth fund not performing well due to lack of directions.
Hence, the members decided to put in their undated resignation letters, paving the way for the Government to reconstitute the Khazanah board. The board members did not want their move to be known publicly but in the new Malaysia, nothing is a secret.
Nevertheless, the development puts to rest the impasse between the sovereign wealth fund and the new government.
Dr Mahathir was instrumental in setting up Khazanah in 1993. When he established Khazanah, he would have had a vision.
However, the corporate world has evolved over the years. Corporate Malaysia went through some rough years. After 2000, Khazanah was the vehicle used to clean up corporate Malaysia.
It cannot go back to what it was previously. That would be a major setback for corporate Malaysia.
All eyes on head honchos of Khazanah-linked firms
PETALING JAYA: The sudden exodus of Khazanah Nasional Bhd’s entire board of directors could only just be the beginning, as the spotlight is now on the head honchos of companies linked to the government’s investment arm.
Tan Sri Azman Mokhtar, who has offered to resign from his position as Khazanah’s managing director, is currently the chairman of telecommunications company Axiata Group Bhd
, which is also a government-linked company.
, which is also a government-linked company.
He had previously served in various capacities with Malaysia’s largest utility company, Tenaga Nasional Bhd (TNB). Azman was appointed to the top post of Khazanah in June 2004. His term as chairman of Khazanah will expire in the first half of next year.
(TNB). Azman was appointed to the top post of Khazanah in June 2004. His term as chairman of Khazanah will expire in the first half of next year.
Meanwhile, CIMB Group Holdings Bhd chairman Datuk Seri Nazir Razak, who was also part of the Khazanah exodus, said last month that he had not decided whether to extend his term with CIMB after it was reported that the search for his successor had started.
chairman Datuk Seri Nazir Razak, who was also part of the Khazanah exodus, said last month that he had not decided whether to extend his term with CIMB after it was reported that the search for his successor had started.
It is interesting to note that current CIMB group chief executive officer Tengku Datuk Seri Zafrul Aziz was among those rumoured to replace Azman when the Barisan Nasional government was still in power.
Another Khazanah director who offered to resign, Tan Sri Md Nor Md Yusof, currently sits on the board of national carrier Malaysia Airlines Bhd (MAS).
In December, MAS appointed Captain Izham Ismail as its newest group CEO – its third in three years.
From 2001 to the third quarter of 2014, before the old MAS was delisted, the airline reported RM2.9bil in profits and RM7.27bil cumulatively in losses.
According to reports, its new CEO plans to “stabilise” the airline by 2020, and is targeting to hit RM1bil in net profit come 2022.
Nor has spent 18 years of his working career with the CIMB group, more notably as president and CEO of CIMB.
Notably, he was appointed as chairman of Lembaga Tabung Haji recently.
IHH Healthcare Bhd, which is 40.42%-owned by Khazanah, is spearheaded by Dr Tan See Leng, who was appointed as the company’s MD and CEO in January 2014 after having served as an executive director on the IHH board for two years. The group’s chairman, Datuk Mohammed Azlan Hashim, was among the directors of Khazanah that resigned.
, which is 40.42%-owned by Khazanah, is spearheaded by Dr Tan See Leng, who was appointed as the company’s MD and CEO in January 2014 after having served as an executive director on the IHH board for two years. The group’s chairman, Datuk Mohammed Azlan Hashim, was among the directors of Khazanah that resigned.
Earlier this month, IHH announced that it was acquiring a controlling stake in Fortis Healthcare Ltd, a chain of specialist hospitals in India.
No stranger to the local utility industry is TNB chairman Tan Sri Leo Moggie. The Sarawakian was former Prime Minister Datuk Seri Abdullah Ahmad Badawi’s first major appointment to a government-controlled agency following the 2004 general election.
Prior to being appointed as TNB chairman in April 2004, he had held senior ministerial positions at the federal and state levels for nearly 40 years.
Another Khazanah-linked company is UEM Group Bhd, which, in turn, owns two listed stocks on Bursa Malaysia – UEM Edgenta Bhd and property developer UEM Sunrise Bhd
and property developer UEM Sunrise Bhd. UEM also owns a 51% stake in highway operator PLUS Malaysia Bhd.
UEM group CEO Datuk Izzaddin Idris was appointed to the helm in 2009. Besides the UEM board, Izzaddin also sits on the boards of several UEM group of companies, including UEM Sunrise, UEM Edgenta and PLUS Malaysia.
On June 6, Telekom Malaysia Bhd (TM) announced that Shazalli had resigned as MD and group CEO of TM, with Datuk Bazlan Osman being appointed as the acting group CEO. – ANN
(TM) announced that Shazalli had resigned as MD and group CEO of TM, with Datuk Bazlan Osman being appointed as the acting group CEO. – ANN
ANN
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