Direction of GLCs unchanged for now

The culling of political or nepotism-based appointees at major companies could, however, result in direction changes, says analyst

By NG MIN SHEN / Pic By TMR

The direction of government-linked companies (GLCs) and government-linked investment companies appears to be unmoved for now, though their courses could alter in the near future as management changes take place.

A spate of major corporate leaders have recently vacated or announced intentions to vacate their positions, following the election of the Pakatan Harapan-led government which has said it intends to end industry monopolies and investigate those linked to the previous government’s financial scandals.

Public Investment Bank Bhd head of research Ching Weng Jin said companies’ investments would likely remain on their chartered courses for the time being, given that most of the day-to-day investment choices are made by firms’ investment teams.

“As long as there are investment merits and markets are attractive, the investment teams will make the necessary decisions to buy and sell. The heads of companies are involved more on a higher level in terms of strategic direction, what markets to enter, etc — so in terms of direction, there won’t be a significant change for now, it’s a bit early to tell,” he told The Malaysian Reserve (TMR).

The culling of political or nepotism-based appointees at major companies could, however, result in direction changes further down the line, said an analyst at a local brokerage.

“It’s a structural change because there’s a lot of inefficiency in the country, so at the GLC level, the monopolies are being dismantled, which means the playing field won’t be the same anymore. Companies’ directions and investment choices should change too for the better. If you look at how fast heads have rolled, we can wager more changes will take place faster than people expect,” the analyst told TMR.

Last Friday, Malaysia Airports Holdings Bhd (MAHB) said Datuk Mohd Badlisham Ghazali’s contract as MD had not been renewed following its expiry on June 22.

Tan Sri Muhammad Ibrahim’s resignation as Bank Negara Malaysia governor was accepted early this month, followed closely by the exit of Telekom Malaysia Bhd (TM) MD and group CEO Datuk Seri Mohammed Shazalli Ramly and TM independent and non-ED Datuk Seri Fateh Iskandar Mohamed Mansor.

Petroliam Nasional Bhd (Petronas) board member and chairman of Petronas’ remuneration committee Datuk Mohd Omar Mustapha has tendered his resignation effective June 30.

Last month, Tan Sri Ismee Ismail stepped down as group chairman of Media Prima Bhd following Datuk Seri Ashraf Abdullah’s resignation as group managing editor for news and current affairs of television networks.

On May 23, Datuk Seri Abdul Azeez Abdul Rahim resigned as chairman of Lembaga Tabung Haji (TH).

Tan Sri Mohd Isa Abdul Samad tendered his resignation as acting chairman of the Land Public Transport Commission (SPAD) on May 28 as requested by Transport Minister Anthony Loke, before SPAD itself was dissolved by the government.

Datuk Seri Mohd Najib Razak, former Second Finance Minister Datuk Seri Johari Abdul Ghani and former Treasury secretary general Tan Sri Dr Mohd Irwan Serigar Abdullah have also resigned as board members of Khazanah Nasional Bhd.

Further notices are expected in the coming days, as the new government intends to make management changes at government-linked institutional investors in order to improve investor confidence with market-friendly and transparent policies.

On questions raised over the size-able remunerations received by some of these GLC chiefs, the analyst noted the importance of considering the scope of their work.

“For some heads, it doesn’t make sense to be earning millions, like the heads of regulators. But for those who are leading large regional businesses which are indeed making money, it’s reasonable for them to be paid well,” the analyst said.