Key agencies prepare to be ruled by Azmin

EPU, Khazanah, LTH, Felda and Mara are some of the agencies said likely to be moved to Economic Affairs Ministry

By RAHIMI YUNUS / Pic By TMR

Key economic departments and government-linked investment companies (GLICs), previously chaired or under the supervision of the prime minister, are likely to be placed under the Economic Affairs Minister Datuk Seri Mohamed Azmin Ali (picture).

The major overhaul of state-owned enterprises would include entities under the Prime Minister’s (PM) Department and the Ministry of Finance (MoF).

Over the last nine years, the MoF had bloated into “a business monster” with many private companies created to undertake business ventures from property developments to gas pipeline projects.

Azmin has been entrusted to oversee all economic matters including how to maximise the contribution of these entities to the country’s economy.

The Economic Planning Unit (EPU), Khazanah Nasional Bhd, Ekuiti Nasional Bhd, Lembaga Tabung Haji (LTH), Federal Land Development Authority (Felda), Majlis Amanah Rakyat (Mara) and SME Corp Malaysia are heavily linked with the move to the Economic Affairs Ministry.

Among MoF Inc’s companies which could be part of the country’s “business entities” overhaul are Keretapi Tanah Melayu Bhd, Malaysian Biotechnology Corp Sdn Bhd, Prokhas Sdn Bhd, Sirim Bhd and Syarikat Perumahan Negara Bhd.

But it is not known how many companies are actually under the MoF. Companies under the MoF include 1Malaysia Development Bhd and Suria Strategic Energy Resources Sdn Bhd, which is involved in the almost RM10 billion gas pipeline projects, and MKD Signature Sdn Bhd, a 51% stake owner in the Exchange 106 within the Tun Razak Exchange development.

The MoF’s ownership of Khazanah means stakes in the fund’s investee companies are directly linked to the Treasury.

Petroliam Nasional Bhd, which currently sits under the PM’s Department, is unlikely to be moved as it would require amendments to the Petroleum Development Act 1974.

Companies and department under the Ministry of Rural and Regional Development, and Ministry of Science, Technology and Information, are also expected to be involved in the shake-up.

The overhaul comes after Barisan Nasional was ousted at the recent general election.

Seven GLICs — MoF Inc, Khazanah, Permodalan Nasional Bhd (PNB), the Employees Provident Fund (EPF), Lembaga Tabung Angkatan Tentera (LTAT), LTH and Retirement Fund Inc (KWAP) — as a group, holds more than RM1 trillion worth of investment.

Private companies have repeatedly complained that the government’s overindulgence in businesses has created unfair competition.

The Council of Eminent Persons (CEP) chairman Tun Daim Zainuddin had said the government should not be involved in business.

Dr Ramon V Navaratnam

The move enables the govt to have better view of the economy for long-term economic purposes, says Ramon (Pic by Muhd Amin Naharul/TMR)

The government has the “power” to influence major commercial decisions, including the award of contracts, key appointments, corporate strategy, financing, asset acquisitions and sales in the corporate world.

“I think it’s the decentralisation of authority and power, as well as a check and balance policy,” Asian Strategy and Leadership Institute director Tan Sri Dr Ramon V Navaratnam told The Malaysian Reserve when asked about the upcoming restructuring of these entities.

It is not known when the government will announce Azmin’s portfolio. The Ministry of Trade, which does not have a minister, could also be transferred to Azmin.

The change in government had also forced changes at government-linked companies (GLCs) and regulators.

Ramon said the consolidation of the companies under the Ministry of Economic Affairs would bring better governance to GLCs and the government will have a better view of the economy for long-term economic planning purposes.

“The good GLCs managers will survive and benefit, while the bad will slowly be phased out in the interest of the nation’s progress,” Ramon added.