No politicians on GLCs’ boards

The appointment will be based on merit and not on political position, says minister


The government has decided that no MPs or state assemblymen shall be appointed as board of directors in government-linked companies (GLCs).

“MPs and state assemblymen, however, may be appointed as board of members under federal statutory bodies,” Finance Minister Lim Guan Eng said in a written Parliamentary reply yesterday.

Lim was responding to MP Wong Chen’s (Pakatan Harapan-Subang) question as to whether the government would prohibit political appointments for GLCs and government-linked investment companies (GLICs).

“In the future, the chairman, board members, CEOs and MDs in GLCs and GLICs will be appointed among qualified professionals who fit the position. It will be based on merit and not on political position,” he said.

Lim said the procedures and methods of appointment will now be organised, transparent and according to best practices which will not require to pass through Parliament first.

Among the politicians that have resigned since Pakatan Harapan’s historical win on May 9 are Federal Land Development Authority chairman Tan Sri Shahrir Abdul Samad, Lembaga Tabung Haji chairman Datuk Seri Abdul Azeez Abdul Rahim and National Higher Education Fund chairman Datuk Shamsul Anuar Nasarah.

Lim, on a separate note, said the federal government is ensuring that its foreign currency-denominated debt does not increase further than the current RM21 billion.

He said domestic debt made up 97% or RM666 billion, while other foreign currency-denominated debt made up only 3% or RM21 billion out of the RM686.8 billion federal government debt.

“We are working to ensure that the foreign currency-denominated debt of the federal government do not increase beyond the current 3%,” Lim told the Dewan Rakyat yesterday, in responds to MP William Leong Jee Keen’s (Pakatan Harapan-Selayang) query on the government’s proposed measure to address the debt and liability issues of RM1.08 trillion.

The total debt of RM1.08 trillion or 80.3% of gross domestic product (GDP) makes up of federal government debt of RM686.8 billion or 50.8% of GDP, government guarantees of RM199.1 billion or 14.6% of GDP.

The government, according to Lim, is committed to help entities which are unable to pay its debt such as Danainfra Nasional Bhd (at RM42.2 billion), Prasarana Malaysia Bhd (at RM26.6 billion), and scandal plagued-1Malaysia Development Bhd (1MDB) (at RM38 billion).

Also included are the lease payments of RM201.4 billion for public-private projects.

According to Lim, the Ministry of Finance is obligated to pay for rental, maintenance and costs on a number of projects, such as the construction of schools, hospitals and roads.

Lim added that the ministry is considering refinancing to service the debts from 1MDB at a lower interest rate, which will provide the government with some savings.

“We need to consider if we can repay the debt by refinancing, so that we can get a lower rate and some savings,” said Lim.

That would lead the government to save up to RM1 billion over 20 years, given the interest rates were to cut by 100 to 120 basis points.