Abolish golden share in MAHB, aviation companies, Mavcom tells government

by RAHIMI YUNUS/ graphic by MZUKRI

THE Malaysian Aviation Commission (Mavcom) has recommended the government to abolish the golden share in Malaysia Airports Holdings Bhd (MAHB) and other aviation companies to ensure a fair and competitive commercial environment.

Mavcom COO Azmir Zain said the government is presently a policymaker, a regulator and a shareholder of various aviation-related companies all at once.

Azmir said these roles could potentially defeat the objective in those respective functions.

“The government’s role within the aviation sector presently spread across multiple functions. The government is a policymaker; a regulator by virtue of the Transport Ministry (MoT), for instance, the Civil Aviation Authority of Malaysia (CAAM) legally reports to the MoT; and a shareholder via various investments such as in Malaysia Airlines Bhd (MAB) and MAHB.”

“The active roles played in all of these functions could essentially blur its objectives at those multiple levels,” Azmir said after presenting Mavcom’s recommendations for the local civil aviation industry in Kuala Lumpur yesterday.

The government, he said, would naturally take policy decisions that are in favour of companies it has shares in and therefore would be detrimental to non-government competitors within the industry.

Being a shareholder and holding golden shares in aviation companies would “blur” the government’s roles with the company’s board of directors.

“The appointment of senior management members, for example, the CEO of MAB and MAHB begged the question whether those appointments were done by the government or the board,” Azmir said.

“For a ministry to step in to take on that role potentially at odds with the idea of the board being responsible for that company,” he added.

Meanwhile, Mavcom executive chairman Dr Nungsari Ahmad Radhi said a golden share might lead to a commercial decision made with a political consideration.

“Not to say a political consideration is bad,” Nungsari said, “but a commercial decision should be made at a commercial level.”

Separately, Nungsari said Mavcom is in close contact with the Malaysian Anti-Corruption Commission and the Securities Commissions Malaysia to look into the bribery allegations against AirAsia Group Bhd’s executives involving the company’s jet deal with Airbus SE.

Under the law, he said the commission would fundamentally evaluate the robustness and fitness of a company as an air service licence holder to run an airline.

He said Mavcom’s role is to assess and give a licence with attached conditions including as per fit and proper person of the company’s officers.

AirAsia CEO Tan Sri Dr Tony Fernandes and executive chairman Datuk Kamarudin Meranun had relinquished their executive positions temporarily for two months or a period that is deemed fit by the company.

They, however, will continue to assist AirAsia as an advisory capacity requested by the board.

“Mavcom also looks at substances, not just forms. So, the accused responsible person could also be any individual who exercises certain degrees of power or influence over a company irrespective of the label that person carries,” said Azmir.

“In our view, the role of an advisor in that particular case fits that description, and then the guideline of fit and proper person would apply,” he added.