Govt unlikely to abandon golden share in MAHB


THE government is not expected to forgo its “golden shares” in strategic government-linked companies (GLCs) as national interests supersede corporate considerations.

Recently, there were calls for the government to release its deciding interests in companies like Malaysia Airports Holdings Bhd (MAHB), Malaysian Airlines Bhd (MAB) and selected GLCs.

An industry analyst said by retaining the golden shares, the government can exert control on the managerial and commercial operation of these companies.

“MAHB is also deemed as transport infrastructure, so it is not going to be easy to do away with a golden share.

“But for airlines, it would make more sense to have it abolished as the sector is pretty much bracing for full liberalisation,” the analyst told The Malaysian Reserve (TMR), but declined to be named.

The analyst said the government could be open to the idea of offloading the deciding share in MAB to entice suitors for the ailing national airline.

“I do agree that the abolishment of golden shares in aviation industries will ensure fair play and transparency in its management and competitive environment,” the analyst said.

The Malaysian Aviation Commission (Mavcom) had proposed the abolishment of the golden share in MAHB and other aviation companies to establish a fair and competitive commercial environment for the industry.

Mavcom COO Azmir Zain said selling the shares in the aviation sector would reduce the government’s interference in policymaking decisions.

He said the government already holds various responsibilities within the aviation industry through the Transport Ministry and Civil Aviation Authority ,apart from its shareholdings in MAHB and MAB.

Azmir said too much control on the management and operation could essentially blur its objectives.

This is also one of the action plans that were suggested by Mavcom in its Economic Master Plan 2021-2030, which was launched recently.

The government’s golden share was introduced since the country’s privatisation of strategic assets like the telecommunication and power sectors. Tenaga Nasional Bhd, which was previously Lembaga Letrik Negara, is a strategic asset. Telekom Malaysia Bhd is also another strategic asset, which was then part of the privatisation initiative.

Besides worries over foreign takeovers, the golden shares will allow the government to vote for tariff and pricing changes. Many other countries also prevent foreigners from having majority stakes in key and strategic industries like power, telecommunication and aviation.

There are worries that a business and profit only approach will dent the country’s transportation sector and national interest. Recently, Cathay Pacific Airways

Ltd asked its 27,000 staff to go on a three-week voluntary leave and cancelled hundreds of flights, crippling the already battered economy of Hong Kong.

Institute for Democracy and Economic Affairs research manager in economic and business Lau Zheng Zhou said holding golden shares gives the government special powers to oversee the appointment of top managerial positions in GLCs.

“There is no guarantee that the government will not intervene at the top management if there is no golden share.

“So, it is better to strengthen existing regulations and empower regulators, while gradually eliminating the need for golden share as means to encourage trust and institutional resillience,” he told TMR yesterday.

This also allows the government to have the final word and make key amendments in decisions that are necessary.

Lau said the golden share was initially targeted at utilities and infrastructure companies which were crucial to national strategic interest.

“But over time, as the country develops and liberalises, direct government intervention has become less relevant as a mechanism to regulate or influence management control.

“In fact, regulators are becoming more equipped and sophisticated and they are in the position to ensure a fair and competitive environment for the industry.”

Previously, the government withdrew its golden share in Bank Islam Malaysia Bhd.

The government has a stake in MAHB through Khazanah Nasional Bhd and the Employees Provident Fund.

Prime Minister Tun Dr Mahathir Mohamad has defended the government’s golden shares as it will prevent mismanagement in strategic sectors.

He also made a reference to 1Malaysia Development Bhd as an example of a firm that had needed the government’s control.