Something rotten in the state of our GLCs

 

Last week’s piece by my fellow columnist, Adzhar Ibrahim, “Glitter and fake glory in the GLC protection racket” (FMT, April 17) opened many cans of worms that have long existed in government-owned companies.

The government is guilty on two fronts:

• wasting off-budget expenditures, amounting to billions of ringgit, by allowing non-competent civil servants and a select few to run their businesses,
• not taking any concrete steps to rectify the situation after the events or financial exposure.
• The issue of whether the government should be in business or running a business in the first place and making business decisions is not a new one.

Often justified on the pretext of assisting Bumiputeras in business, the argument is becoming weak and has gone far off tangent.

Bona fide entrepreneurs, Bumiputera or otherwise, are not given the chance to participate, unless they are within the elite inner circle of the political party in power.

However, after the exposures about 1MDB, in Malaysian and US courts, the public is much wiser after the event. I am not sure if that can be said of the government though.

Court proceedings show they are very much aware that the involvement of these incompetent managers, directors and the former finance minister, have led to massive losses on the part of the government.

The key question to ask is this:

What has the government of today done to prevent any more failures, mismanagement, fraudulent practices and embezzlement of public funds that have been proven in the courts of law?

1MDB and other scandals

No doubt, the pinnacle of embezzlement is represented by 1MDB and its subsidiary companies. But similar acts to defraud, to deceive and to siphon out the government funds, are found in many other GLCs, too.

Shouldn’t the government of the day, therefore, take the required steps to prevent them from happening again?

Are there any new legislation or regulations adopted as a matter of strategy and urgency to tighten business protocols?

Shouldn’t the government, as majority shareholders in these companies, take a major part of the blame, for not being competent enough to manage them and not preventing fraudulent acts from being repeated?

I think many readers would agree with me that it is rather pointless for the leader of the opposition, Anwar Ibrahim, to engage former finance minister Najib Razak, in a debate on what, when and how it went wrong with certain GLCs.

For instance, we are fully aware that despite being owned by the finance ministry, Khazanah or Permodalan Nasional Berhad, many GLCs are embroiled in financial scandals and have incurred big losses in their so-called investments.

What we are not certain is whether those investments were genuine and above board or if they were simply cooked-up schemes or well thought out scams by professionals.

Exposing financial losses through a public debate is of no help or of any benefit to anyone.

The government should take stern action by mounting forensic audits and detailed investigations into some of their loss-making ventures or ‘fake’ investments. Those found responsible should be charged. Let the law take its course and punish the guilty ones.

Questions of competence

The government should rectify all their past mistakes and take preventive measures.

Intricately linked to this old issue of competency is the question about a selective group of civil servants being tasked to manage government-owned business organisations, especially those under the umbrella of Khazanah, Permodalan National Berhad and Minister of Finance Incorporated.

The big question is; since when have our civil servants been trained to manage commercial organisations? They have been tasked to do a double act, as a regulator and a business expert to make commercial decisions and on how to run their businesses.

There is a long list of commercial organisations owned by the government that are engaged in running businesses.

Examples includes Malaysia Airports, KTMB, Prasarana, MRT Corp, Tenaga Nasional, Telekom Malaysia, Malaysia Airlines, Bintulu Port Holdings, UDA Holdings, several banks and many more.

Equally at fault, is the poor selection process of favouring a limited pool of managers that are known to the finance ministry or Prime Minister’s Office only, before they get selected and offered the high-ranking positions.

In the last few years, this decision has been made worse by the placement of politicians into the chairmanship of these corporations.

Square pegs in round holes

By right, these corporations should be engaging the best man to be at the top in order to drive the GLC forward or take it to the next level.

But Malaysia’s Bumiputera-first management approach is that we always try to put square pegs into round holes.

When wrong decisions are made, resulting in losses to business concerns, board members should be taken to task, made answerable, resign and charged.

But in Malaysia, any mess created by top-notch executives is swept under the carpet. Accountability is always in short supply, while transparency does not exist.

How much more must the country lose before steps are taken to stop all this nonsense? The 1MDB scandal has demonstrated that such practices have been rampant in GLCs for many decades, especially within those firms that were linked to certain politicians.

A complete revamp is long overdue. Quangos such as Khazanah, Petronas, PNB, EPF, Felda, Boustead and Lembaga Tabung Haji should be restructured, their subsidiaries sold via open tenders and completely privatised.

There are no good reasons any more for the government to be running businesses, merely because politicians think of themselves first.

I am told that at a board meeting of a GLC, chaired by a politician, a discussion on the serving of “durian” crepes took longer and was more critical than examining a paper before the board.

Such is the state of our GLCs. It is rather sad, but that is how they cash in on the opportunity, especially in the current political climate and in the vacuum of uncertainty. - FMT

The views expressed are those of the writer and do not necessarily reflect those of MMKtT/