Prime Minister Abdullah Ahmad Badawi today denied rumours that the chief executive of national carmarker Proton faces the sack for criticising government auto policy, a report said.

The New Straits Times earlier said Proton's board of directors called an emergency meeting late Thursday to discuss CEO Tengku Mahaleel Ariff's reported comments that Proton had received "poor treatment" from the government.

The government is the major shareholder in Proton through a 42 percent stake held by its investment arm Khazanah, which in turn is chaired by Abdullah.

However, the prime minister denied suggestions that Khazanah had asked the Proton board of directors to remove Tengku Mahaleel.

"I chaired the (Khazanah) meeting (and) there was no such decision," he was quoted as saying by the official Bernama news agency.

According to Bernama , rumours have surfaced that Tengku Mahaleel ( photo ) was issued a "show cause" letter asking why he should not be removed for his critical comments and was given a week to reply.

Proton chairman Abu Hassan Kendut resigned earlier this year, reportedly after a board decision to remove Tengku Mahaleel was overruled by the government.

Proton used to sell six out of every 10 new cars in Malaysia but growing foreign competition is eating into its market share which fell to 44 percent last year from 48 percent in 2003.

The government has urged the carmaker to become more competitive as it faces a growing influx of imports in a newly deregulated environment.