State-controlled automaker Proton today announced the appointment of Mohamad Azlan Hashim as chairman after Abu Hassan Kendut quit the post, the official Bernama news agency reported.

Abu Hassan's resignation was effective immediately, Proton said.

Mohamad Azlan is a former Kuala Lumpur Stock Exchange executive chairman.

The Asian Wall Street Journal Friday reported that Abu Hassan resigned because he felt former Prime Minister Dr Mahathir Mohamad, who has no formal executive position in Proton, was interfering with management efforts to revamp the long-protected automaker.

Abu Hassan had represented Proton's biggest shareholder, government investment arm Khazanah Nasional.

Azlan's statement

Khazanah raised its stake in Proton to 43 percent last month when Japan's Mitsubishi Corp. sold its 7.9 percent stake for RM384 million.

Mahathir was appointed adviser to Proton in April last year. He created the company in 1983 as part of Malaysia's drive into heavy industry but has denied interfering in management.

Azlan said in a statement released by Proton: "As chairman, I will work closely with the other board members, senior management and the government to guide Proton to achieve its corporate objectives and fulfil its responsibilities as a major national enterprise.

"Recognising the immense challenges facing the industry, domestically and globally, it is my intention that Proton will spare no effort to continually strengthen and improve itself.

"As part of this process, we will meet and consult with all relevant parties for their input, guidance and advice," he said.

New models

The Journal said Abu Hassan quit after Prime Minister Abdullah Ahmad Badawi overruled the board's plan to remove chief executive Tengku Mahaleel Ariff.

Abdullah had earlier backed the decision to replace Tengku Mahaleel, a Mahathir protege, but changed his mind after the ex-premier asked that Mahaleel be retained, it said.

It said the exchange clearly showed that Mahathir, who retired in October 2003 after 22 years in power, continued to wield influence in both political and corporate affairs.

The Edge said Tengku Mahaleel would remain chief executive since he had been asked to stay on and "see through what is a critical year for Proton."

Proton is in talks with Volkswagen and was set to launch two new models in the next six months, it said.

"The Volkswagen deal is crucial and it will be expedient for Mahaleel to see this through," it quoted a source as saying.

It said Khazanah had agreed to extend Mahaleel's contract, which is due to expire in April this year.