GLCs will play a major role in reviving the economy once the Covid-19 crisis subsides as it controls a third of the economy
by ALIFAH ZAINUDDIN/ pic by MUHD AMIN NAHARUL
THE government is expected to make further changes to the leadership of state-owned companies and federal agencies which is part of an effort to consolidate control over the corporate sector.
The new administration has set off a wave of changes in the past month, including swift removals of figure heads at Majlis Amanah Rakyat (Mara), resignations at Tekun Nasional and Khazanah Research Institute, and the appointment of Prime Minister Tan Sri Muhyiddin Yassin to the board of Khazanah Nasional Bhd.
University of Tasmania’s Asia Institute director Prof James Chin said leadership shake-up is expected to continue as government-linked companies (GLCs) and government-linked investment companies (GLICs) will play a major role in reviving the economy once the virus crisis subsides. GLCs control about half of the local stock market and a third of the economy.
“The Perikatan Nasional (PN) government will remove all those appointed by Pakatan Harapan and this is expected. PN is in the process of bringing the old gang back,” Chin told The Malaysian Reserve.
“Another reason is they need to bring back patronage via contracts to PN politicians. Umno businesses were damaged during the previous government’s rule so they are now trying to rebuild their businesses. The fastest way is through GLC contracts,” he said.
Among the big names that have already vacated their positions include Bank Rakyat chairman Datuk Noripah Kamso, whose contract ended on March 3 and Khazanah Research Institute chairman Dr Nungsari Ahmad who stepped down last week, to make way for Tan Sri Nor Mohamed Yakcop who is expected to return to the role.
Meanwhile, Malaysian Palm Oil Board chairman Tan Sri Mohd Bakke Salleh is also expected to vacate his position soon.
The most recent change was seen at Affin Bank Bhd. Wan Razly Abdullah Wan Ali was appointed the new CEO, replacing Kamarul Ariffin Mohd Jamil who completed his contract on March 31. Affin Bank is 35.51% owned by the Armed Forces Fund Board.
Prior to his appointment, Wan Razly Abdullah served as CFO of CIMB Group Holdings Bhd’s Indonesian subsidiary PT Bank CIMB Niaga Tbk.
His return to Malaysia last year made him regional head of consumer strategic business management at the bank.
It was reported that Affin Hwang Capital is also in search of a new group MD to replace Datuk Maimoonah Hussain, who retired in November last year.
Universiti Malaya political economist Prof Edmund Terence Gomez said further shifts will only add more political mileage to the PN government and allow it to consolidate power.
“Mara and Tekun will give the government control over Bumiputera small and medium enterprises (SMEs). Khazanah gives them control over the largest-listed GLCs. Muhyiddin may move to link these GLCs to SMEs. Selective patronage is based not just on ethnicity but also politics. Many members in Umno and Parti Pribumi Bersatu Malaysia are in business through SMEs,” Gomez said.
Bank Negara Malaysia last Friday said Malaysia’s economy could shrink to -0.2% in 2020, its worst since the 2009 Asian Financial Crisis, due to the Covid-19 pandemic. The economy grew 4.3% last year.