Questionable appointments dampen investor confidence, govt told

 

Gamuda Bhd’s Rashdan Yusof was appointed chairman of the Energy Commission in February. (Bernama pic)

PETALING JAYA: The government must be consistent when making appointments to key regulatory bodies or risk dissuading investors from committing funds to emerging industries, said an economist.

Barjoyai Bardai of Universiti Tun Abdul Razak said the recent appointment of a senior executive from Gamuda Bhd as the chairman of the Energy Commission was an example of conflict of interest which could hinder investor confidence in the renewable energy sector.

“The government must strive to apply the basic principles it preaches (on good governance) rather than saying one thing and practising another, otherwise investors will not believe anything it says,” Barjoyai told FMT.

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The appointment of Gamuda group deputy managing director Rashdan Yusof as the head of the energy regulator in February had raised concerns from anti-corruption and transparency groups as well as industry players and businesses, due to fears of conflict of interest and that it would not boost investor confidence.

Barjoyai Bardai.

Gamuda is a major player in the renewable energy space, and as recently as last December, announced that it was spending RM2 billion to grow its renewable energy business.

So far, it has acquired a 30% stake in ERS Energy Sdn Bhd, a company involved in solar energy.

Last Friday, natural resources, environment and climate change minister Nik Nazmi Nik Ahmad defended Rashdan’s appointment, saying it was intended to “shake up” the regulator’s approach to energy transition.

He also said federal legislation “clearly provides” for instances of conflict of interest and ways to deal with them, citing the Energy Commission Act 2001 (EC Act 2021), which requires commission members to declare their interests, as an example.

Edmund Terence Gomez.

Political economist Edmund Terence Gomez said Nik Nazmi’s justification for Rashdan’s appointment was “extremely unsatisfactory”. He asked if the minister was aware that Gamuda had publicly declared its focus on renewable energy.

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He said Gamuda’s 30% stake in ERS Energy reflected its interest in renewable energy.

If Nik Nazmi was aware of this yet went ahead with Rashdan’s appointment, it indicated “poor judgment” on the minister’s part, Gomez said.

He said the fact that Nik Nazmi cited the federal legislation for instances of conflict of interest also indicated that he was aware such situations might arise.

“The minister has justified this appointment on the grounds that he wants to shake things up in the Energy Commission. While this should be commended, how he is going about it is extremely disturbing.

“He should know that one key role of the commission is to ensure fair market conduct, but how can companies in the renewable energy sector be assured of this when the commission chairman is a senior executive of a company that aims to venture into this industry?” he said.

The Center to Combat Corruption and Cronyism has said Putrajaya must explain the selection process involving Rashdan’s appointment transparently, while Transparency International Malaysia urged Rashdan to turn down the position. - FMT