The Malaysian Insight

KHAZANAH Nasional is to get a new boss in 14 years soon, after Prime Minister Dr Mahathir Mohamad’s remarks last week that clearly suggested the sovereign wealth fund is to be given a new direction with fresh leadership at the helm.

The Malaysian Insight understands that Khazanah managing director Azman Mokhtar, whose contract ends next June, has indicated he is prepared to go earlier if given the marching orders from Putrajaya.

It is widely known among most Malaysian corporate circles that Azman has been unsuccessful in efforts to meet Dr Mahathir, who is Khazanah chairman by virtue of being prime minister.

In recent weeks, heads of government-linked investment companies and funds have left or their contracts not renewed, including Permodalan Nasional Berhad chairman Abdul Wahid Omar, who resigned in June after failing to meet Dr Mahathir.

Former prime minister Najib Razak resigned as Khazanah chairman after his Barisan Nasional (BN) coalition was swept out of power in the May 9 elections. The other board members who resigned included former finance minister II Johari Abdul Ghani and former Treasury secretary-general Irwan Serigar Abdullah.

The Khazanah board failed to meet in April because of the general election and Dr Mahathir has yet to convene a board meeting in June after he took power. The next meeting is due in September but government sources said it will not take place until a leadership change is done.

Khazanah is owned by the Ministry of Finance (MoF) Inc and has traditionally been chaired by the prime minister. Apart from Najib, former prime minister Abdullah Ahmad Badawi was also chairman and before him, Dr Mahathir.

Azman has been managing director since 2004 when Abdullah was PM.

Dr Mahathir, who formed Khazanah in 1994 to hold shares in government firms, told local media that “they were no longer following the initial intention of the formation of Khazanah”.

“We need to go through the huge number of companies they hold shares in, we have to categorise them into the ones that can be profitable, the ones that may be profitable and the ones that will be losing. We need to agree with some of these companies to reduce the number, and to a certain extent go back to the original intention of holding the shares allocated to the Bumiputeras until such time when they can buy,” he said then.

The prime minister, who is in power for a second time after a break of 15 years, was blunt about Khazanah, saying the strategic investment arm “was doing all kinds of funny things, they are buying houses. they are creating and taking over companies”.

Dr Mahathir’s comment effectively raised question marks over Azman’s position as managing director, a post that he has held under two prime ministers.

In response, Khazanah said in a statement last week that it was “seeking further clarification as necessary from the government and other respective parties… with a view towards clarifying, reaffirming and implementing our mandate as the strategic investment fun of the government of Malaysia”.

The Khazanah website states that it holds and manages the commercial assets owned by the government and undertakes strategic investments on behalf of the nation and has interests in more than 100 companies in a number of sectors from power and aviation to healthcare and financial services.

As of December 2017, Khazanah has a realisable asset value of RM157.2 billion while its net worth adjusted reached a record high of RM115.6 billion. – July 13, 2018.