The Centre to Combat Corruption and Cronyism (C4) today expressed concern about the naming of Prime Minister Dr Mahathir Mohamad as chairperson of Khazanah Nasional Berhad and urged the government to do away with appointing individuals to the board "by convention".
In a statement, its executive director Cynthia Gabriel also called for appointments to government-linked companies (GLCs) and government-linked investment companies (GLICs) to be vetted by a committee to ensure that a conflict of interest does not arise.
“We are concerned about how the restructuring takes place to ensure professional competency, especially with GLICs, as they hold under their purview other GLCs too.
"What are the criteria for restructuring? If there is a second minister on the board, how can we ensure that cronyism and political appointees can be avoided? Malaysia certainly doesn’t need old wine in new bottles," she said.
According to Cynthia, the method of appointing a chairperson "by convention" does not inspire confidence in the spirit of checking the concentration of power in the political and economic nexus - a key factor that contributed to corruption scandals, such as the 1MDB.
She noted that bodies like Felda Global Ventures, Felda Investment Corporation and its linked companies have had serious mismanagement and corruption, due to the politicisation of its board.
"Khazanah, as a GLIC, is at greater risk of corporate mismanagement because Khazanah is not governed by a statutory act which stipulates what powers the respective ministers-in-charge are entitled to, and who they can appoint."
Thus, Cynthia made several recommendations to the government, including the setting up of a committee to vet new candidates for chairpersons of GLCs and GLICs, and advise the prime minister, to ensure that no conflict of interest can happen.
Besides, she also called for a total restructuring of the GLC ownership structure that prioritises good governance and service delivery to the rakyat, while maximising barriers against graft and illicit enrichment.
"C4 calls on Pakatan Harapan government to err on the side of caution, in the name of good governance, to uphold accountability in our economic restructuring and keep Pakatan Harapan’s promise of no politicians on boards of GLCs/GLICs inclusive."
Khazanah's board of directors last week offered to resign en masse after Mahathir's criticism that Khazanah had strayed from its original objective. The government accepted the resignations.
Apart from Mahathir as the chairperson, Economic Affairs Minister Azmin Ali is one of its directors.