MAB won’t pull down Khazanah’s RM5b FY19 profit, says Azmin

pic by RAZAK GHAZALI

KHAZANAH Nasional Bhd’s estimated RM5 billion profits for the financial year 2019 (FY19) will not be dragged by ailing flag carrier Malaysia Airlines Bhd (MAB), said Economic Affairs Minister Datuk Seri Mohamed Azmin Ali (picture).

He said Khazanah’s management and the government are currently looking at all submitted proposals relating to MAB’s future.

“All proposals are being considered to ensure that Khazanah will no longer be burdened by injecting more capital into MAB,” he told reporters at the Parliament lobby yesterday.

Mohamed Azmin said he believed that in the government’s effort to bring Khazanah back to black, MAB which has been bleeding for years, would not further drag down the fund’s profit.

“From the recent divestment done by Khazanah, we are also looking at other areas to invest in which will give better returns, higher profits and would result in more dividends for the government.

“On MAB, we should be able to conclude the discussion the soonest as we need to ensure that we get the best value and the right partner to inject capital,” he said, adding that the Khazanah board will discuss the matter again at the next meeting.

Khazanah owns 100% of MAB after buying out minority shareholders and delisting the company in its 2014 turnaround effort.

Last year, the sovereign wealth fund reported its first loss since 2005. The pretax loss of RM6.3 billion reported for 2018 was largely attributed to an impairment of RM7.3 billion.

Most of it was a write-down on Khazanah’s investment in MAB which has been mired in an eight-year losing streak despite an RM24 billion injection of government funds in 2014.

On separate matters, Azmin highlighted that discussions on the 20% oil royalty has not been finalised and that the current distribution is a courtesy grant. He clarified that the courtesy payments were given at a fixed rate.

“We need to reconsider and the 20% royalty is still being discussed.

“We are still using the old method, but no longer controlled or managed by the federal government. It is being paid directly to the state government because it’s a constitutional right,” he added.

Azmin said the government had in principle agreed that the cash payments referred to as “royalties” will continue to be paid to state-owned oil producers.

Apart from Kelantan, payments were distributed to Terengganu, Sabah and Sarawak. He said the current government did not use the “wang ehsan” payment as practised by the previous administration.

“I am not sure of these allegations because in principle cash payments are made directly to the state government and at a fixed rate,” he said.

Azmin was responding to the statement by Kelantan Mentri Besar Datuk Ahmad Yakob, who denied receiving petroleum royalty payments from the federal government.

This was followed by a statement by Finance Minister Lim Guan Eng, who earlier said the payment of royalties to the Kelantan government had been made last month under the direction of Prime Minister Tun Dr Mahathir Mohamad.

“I was informed that Petronas (Petroliam Nasional Bhd) will make payments to the Finance Ministry and the ministry will make payments directly to the state.

“Today there is a statement from the finance minister that payments to Kelantan were made recently while Terengganu has been fully paid,” he added.

In another development, Azmin denied rumours that he is about to form a new party. The PKR deputy president insisted that he is still loyal to the leadership and that the views of PKR co-founder Syed Husin Ali on the matter had no effect.

“He’s been in politics for decades. Maybe he is jealous of Dr Mahathir getting good response from the people.

“I was elected as I won a majority in the last elections and I got the mandate from PKR members. Unless someone is jealous and wants me out, I will remain in the party, support the leadership and members,” he said.

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