Khazanah Nasional Bhd's role as the government's strategic investment arm must continue, said Umno lawmaker Khairy Jamaluddin.

According to the Rembau MP, Khazanah has become a different entity than what it was at the end of Dr Mahathir Mohamad's first tenure as prime minister.

Back then, he noted, Khazanah did not have a strategic role and served essentially as a holding entity for the governments' stake in companies.

“Post-PM (Mahathir's first tenure), Khazanah was transformed from just a holding entity to a strategic investment arm with a mandate to not just increase asset value but also make investments into sectors that would benefit the nation.

“Khazanah recruited the best and brightest Malaysians to do this. It would be a shame to dismantle everything that has been built only to replace it with the business mode of the 1990s.

“My fear: GLCs (Government-linked Companies) will be broken up and flogged off to a new set of 1990-esque businessmen,” he added in a series of tweets.

The former youth and sports minister was commenting on Khazanah's board of directors, including managing director Azman Mohktar, having offered to resign from the board.

Khairy said he was not surprised by the latest development.

“Apparently PM has yet to even grant MD an appointment at the office. BoD meeting cannot be called. Even with upcoming changes, I hope present GLC model will be continued. GLC transformation is a success story. Need tweaks for sure.

“For instance, GLCs have (in some sectors) crowded out private business. This was a long-standing issue. That was probably the spirit of PM’s comments that GLCs deviated from Bumi agenda. So tweak needed there,” he added.

Early this month, Mahathir claimed that Khazanah had deviated from its original objective of helping the bumiputera.

He said Khazanah was established in 1993 to hold shares for the bumiputera until the latter possessed the capacity to purchase those shares.

The prime minister said this was because the bumiputera who received shares had the tendency of selling them and enriching others instead.

"But along the way, Khazanah decided it should take all the shares for itself and if they are good shares, well, why not acquire the shares at the time of listing when the price of shares was very low and so they forget entirely about holding the shares for the bumiputera.

"They decided that they should be holding the shares forever as a part of the government companies owned by the government," Mahathir added.