PAC to probe MAHB share sales, Khazanah investments in 2025

The Public Accounts Committee (PAC) will initiate proceedings on five new issues next year.

PAC chairperson Mas Ermieyati Samsudin stated that the proceedings fall under the Standing Orders and are expected to take place from Feb 3 to March 6, 2025.

She said the proceedings would cover airport management under the Finance Ministry, Malaysia Airports Holdings Berhad (MAHB), and Khazanah Nasional Berhad.

“PAC will also begin proceedings on Khazanah’s domestic investments under the Finance Ministry and Khazanah, as well as the development of Kuala Lumpur land under the Federal Territories Department and Kuala Lumpur City Hall (DBKL).

“The proceedings will address issues related to the private healthcare service ecosystem, regulatory mechanisms, legal frameworks, and financing methods through medical insurance: the implications of rising private healthcare costs on public hospitals under the Finance Ministry, Health Ministry, and Bank Negara Malaysia.

“It (the proceedings) will further cover the leasing of electric trains for 30 years valued at RM10.7 billion, under the Transport Ministry, Economy Ministry, the Railway Assets Corporation, and Keretapi Tanah Melayu Berhad,” she said during a press conference at the Dewan Rakyat today.

Report submitted

Mas Ermieyati had yesterday presented the PAC’s performance for the year, with the committee’s report submitted to the Dewan Rakyat speaker Johari Abdul.

Concluding the recurring issues identified by the PAC, Mas Ermieyati highlighted six key findings in the committee’s report for the year.

She said the main issues involve governance and legal compliance, financial and investment management, project, infrastructure, and contract management, law enforcement, and operational sustainability.

“This includes findings related to conflicts of interest, internal controls, and the enhancement and empowerment of technology use.

“Based on these issues, governance and legal compliance were the most frequently identified concerns across ministries, departments, and government agencies.

“This indicates persistent structural and procedural weaknesses within government institutions or agencies as a whole,” she added.

Stakeholder’s opposition on selling MAHB shares

In a separate press conference, Machang MP Wan Ahmad Fayhsal Wan Kamal claimed that he possessed a document from a stakeholder that opposed the government’s proposal to sell MAHB shares.

He claimed that the document contains the stakeholder’s opposing view of the government's plan citing disagreement with the share price.

“In my possession, I have a document provided by a stakeholder in this privatisation transaction which states that there are objections and opposition expressed to Khazanah, Employees Provident Fund (EPF), and the government, that they do not agree with what the government is offering today regarding the share price,” he said.

Quoting the purported opposing document, Wan Fayhsal said that the RM7 per share is too cheap and Malaysia will definitely suffer losses due to the sale.

“Because the offered price is very low and does not reflect the true potential and value that MAHB can contribute to the national economy.

“In my opinion and according to expert analysis, as well as based on the objection notes I have, selling these shares would be a commercial and economic betrayal to the country,” he added.

However, Gateway Development Alliance (GDA) and its partners have formally offered to take MAHB private at a price of RM11 per share.

This follows the approval of relevant authorities in Turkey, Saudi Arabia, Egypt, and Malaysia, as outlined in the May 15 pre-conditional offer announcement.

Background

The consortium, led by Khazanah’s subsidiary UEM Group Bhd and the EPF, also includes Abu Dhabi Investment Authority (Adia) and Global Infrastructure Partners (GIP).

Despite the controversy surrounding GIP's alleged ties to Israel, the firm, recently acquired by Blackrock, remains a part of the consortium.

As of Nov 15, the consortium and its parent companies collectively own 41.1 percent of MAHB’s shares.

The RM11 offer values MAHB at RM18.4 billion, representing a 49.5 percent premium over its 2023 closing price. This valuation equates to a price-to-earnings ratio of 37.7 times based on MAHB's 2023 earnings, significantly outperforming the FTSE Bursa Malaysia KLCI’s 10 percent year-to-date performance.

If the offer is fully accepted, UEM Group’s stake in MAHB will increase from 32.99 percent to 40 percent, and EPF’s stake will rise from 7.86 percent to 30 percent.

This means Malaysian investors will hold 70 percent of the company, while Adia and GIP will own the remaining 30 percent.

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