‘Khazanah lost RM6.3bil in ventures’

HIGH investments risk in a handful of companies are among the reasons why Khazanah Nasional Bhd incurred pre-tax losses of RM6.3bil last year, says Parliament’s Public Accounts Committee (PAC).

The PAC revealed this following a probe on Khazanah’s huge losses in 2018 compared to the RM2.7bil profit the government’s sovereign wealth fund made in 2017.

PAC chairman Datuk Dr Noraini Ahmad said Khazanah’s previous investment strategy saw between 80% and 85% were focused on nine to 10 companies.

“This strategy exposed Khazanah to high investment risks,” she said in a statement.

Noraini said among other factors leading to the losses was the implementation of government policies, particularly in the telecommunications sector, which affected several companies owned by Khazanah.

“The adoption of the Financial Reporting Standards in Malaysia in 2018 was also a factor as it resulted in Khazanah reporting RM3.1bil in collective value depreciation,” she said.

She said the losses were not reported in the Auditor-General’s Report and the PAC had used its power under Dewan Rakyat Regulations to initiate the proceedings after it gave rise to public speculation.

Noraini said former senior deputy secretary-general in the Prime Minister’s Department Datuk Seri Mohd Zuki Ali and Khazanah’s managing director Datuk Shahril Ridza Ridzuan were summoned to testify before the PAC.

Zuki was Khazanah’s monitoring officer while Shahril, the former Employees Provident Fund’s chief executive officer, was appointed to Khazanah in August last year.

Noraini said the PAC was satisfied with the explanation given by Zuki and Shahril over Khazanah’s losses for 2018 and restructuring efforts under the Pakatan Harapan administration.

“PAC recommended Khazanah implement new risk control strategies, including conducting investment professionally and free of political interference.

“Khazanah has been given one year to report back to the PAC on its recommendations to improve,” she said. - Star