LETTER | Khazanah Nasional Berhad is Malaysia's sovereign wealth fund entrusted to enhance the nation's long-term wealth. Its mandate is to grow Malaysia’s long-term wealth to sustainably increase the value of investments while safeguarding financial capital injected into the fund. Long-term refers to a period spanning generations and focuses on ensuring future generations’ ability to meet their needs.
Wealth refers to the value of Khazanah’s financial assets and economic development outcomes for the nation. Khazanah plays a role as a catalyst in driving various strategic industries and national initiatives, promoting the development of the industry in pursuit of Malaysia's long-term economic interests.
Khazanah drives shareholder value, increases efficiency gains and enhances corporate governance in government-controlled companies known as GLCs. The major listed companies in Khazanah's portfolio are some of the largest and most important companies in Malaysia including Axiata Group Berhad, CIMB Group Holdings Berhad, Tenaga Nasional Berhad, Telekom Malaysia Berhad, Malaysia Airports Holdings Berhad and Malaysia Airlines Berhad.
Based on full financial statements ending in 2018, Khazanah's performance showed a significant drop. Two key indicators for measuring financial performance are the Realized Asset Value (RAV) and Net Worth Adjusted (NWA). The RAV in 2018 is RM135.5 billion, a decrease of RM22 Billion or 14 percent compared to 2017. The NWA in 2018 is RM90.6 billion, a decrease of RM25 billion or 22 percent compared to 2017.
The current RAV and RWA values throw Khazanah's financial strength back to years 2012-2013. Facts show that the administration under the sixth prime minister, Najib Abdul Razak, drove Khazanah’s financial improvements between 2008 to 2017. Khazanah's administration at that time was also under Malaysians, not foreigners. Today, the news circulated that Khazanah will move its headquarters from the Petronas Twin Towers to Mercu UEM in KL Sentral as the sovereign wealth fund seeks to reduce operational expenses.
On July 1, Khazanah announced the appointment of new board members which came into effect on June 26. The majority of Malaysians are surprised with the appointment of the new board member from China, Professor Xiao'ou Tang. He is the founder of SenseTime, an artificial intelligence company (AI). Interestingly, on April 27, the Malaysian prime minister made a visit to SenseTime's office and witnessed a deal signed between G3 chairperson Wan Khalik Wan Muhammad, SenseTime Asia Pacific President Jeff Shi and chairperson of China Harbor Engineering Co Ltd (Chec) Lin Yi Chong. This agreement is to develop an Artifical Intelligence Regional Epicenter in Malaysia.
What is the rationale for appointing this Chinese citizen as Khazanah's board member and who will manage the funds of our country's sovereign funds? Is this appointment part of the prime minister's visit and a secret deal with the Chinese government? Dewan Pemuda Ikatan Malaysia urges Khazanah to defend our sovereignty, especially in a situation facing a superpower like China. We do not want to see China dictating Khazanah’s long-term strategy.
On the same day, a news portal reported that two Petronas directors, former Bank Negara governor Muhammad Ibrahim and former Bursa Malaysia chairperson Amirsham Abdul Aziz, were dropped as board members. At the same time, Ahmad Faris Rabidin was appointed to the board. He is also on the board of the Securities Commission of Malaysia.
Former prime minister Najib talked about a blogger who wrote 1MDB propaganda on his portal and who was appointed to the Petronas board. Dewan Pemuda Ikatan Malaysia urges Petronas to make a statement on this matter to clarify the situation. Ironically, this person is also a member of the 1MDB investigative committee under a government advisory Council (Council of Eminent Persons).
Petronas was established in 1974 to become the driver of upstream and downstream operations within our country. For decades, Petronas has consistently demonstrated that it is a capable partner with foreign governments as well as maintaining good relationships with other state-owned oil companies operating in our country in exploring and developing oil and gas resources in Malaysia.
Dewan Pemuda Ikatan Malaysia urges the government to let Petronas operate as an independent entity without any political intervention and pressure. Defend the Petronas establishment and its glorious name.
The writer is youth chief, Parti Ikatan Bangsa Malaysia.
The views expressed here are those of the author/contributor and do not necessarily represent the views of Malaysiakini.