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The Sovereign Wealth Fund which is preparing to host a new set of directors is expected to return to its former role as a strategic investment agency of the government rather than a sovereign fund.
Khazanah Nasional Bhd board members knew that things would be different after the results of the 14th general election. The writing was on the wall of the statements of Prime Minister Tun Dr Mahathir Mohamad and the subtle messages coming from Putrajaya.
Even Tan Mo Mohd Nor Mohd Yusof, a person close to Dr. Mahathir, could not do much to get a clear idea. Photo, apart from having an idea that the government wants to see a change in the Khazanah board of directors.
On Monday, June 23, the message came for the nine members to resign. On Tuesday, Putrajaya received his undated letters of resignation. It was supposed to be a matter of silence.
But the news broke Thursday morning and Friday night, it became clear that Khazanah would see a new picture – as early as next week.
The situation is not unique to the Khazanah board of directors.
Leaders of many government agencies, many of whom were appointed by political power, have been asked to resign since May 9 with new appointments to these positions.
The slaughter of these heads began with some 17,000 political appointments. He was told to go and that the process of purification flowed to the heads of the government-related companies (GLCs) who had prominent roles in the previous administration.
Soon enough, Datuk Seri Mohammed Shazalli Ramly, then CEO of Telekom Malaysia Bhd 
resigned and was followed by other big names such as Tan Sri Abdul Wahid Omar leaving Permodalan Nasional Bhd as president.
"After leaving Wahid, they knew that the writing was on the wall," says a source.
The changes seem to be accelerating, as evidenced by the fact that the current government wants all these posts to be replaced by their citizens by Merdeka Day. News of possible departures of heads of government agencies continued to swirl and this week the biggest change of all was announced.
On Thursday, Khazanah issued an official announcement that his entire board of directors had offered their resignations in undated letters, meaning
This move surprised many and caused a stir, given the decision in unprecedented mass of the board of directors to leave.
"It seems to me that they are resigning in protest. The reason given is valid, that is to say that they give the new government the opportunity to appoint people who can work with him. I respect him for that. "But the fact that they announced a massive resignation after a group meeting gives some clues of protest," says Wan Saiful Wan Jan, strategist of the Pribumi Bersatu Malaysia Party and chairman of The National Higher Education Fund Corp.
While the resignation bid of the Khazanah board took the market and political observers by surprise, expectations were that the stalemate was to end. Khazanah was subjected to repeated criticism by Dr. Mahathir, the last salvo being that his attention had diminished. The previous denunciations referred to the sums of money paid to Khazanah senior management.
Like many in the government and its agencies, Khazanah's general manager, Tan Sri Azman Mokhtar, had to make a presentation to the Council of Eminent Persons. he was summoned. It is believed that the presentation examined how toll rates could be lowered, as Khazanah owns 51% of PLUS Malaysia Bhd.
Since then, there has been essentially radio silence and this has not helped the current leadership in Khazanah, as word He told how Azman could seal a meeting with the prime minister after reports indicating that he had been asked to leave had periodically done their round intermittently.
Such a stalemate had put Khazanah in a straight jacket because it could not function effectively. The board of directors was also handcuffed by the fact that it could convene a plenary meeting without appointment of the chairman.
This position belongs to the Prime Minister and Dr. Mahathir does not sanction him by appointing him president or by choosing a suitable substitute or substitute, the board of directors, and therefore the decision-making process, within Khazanah. been frozen.
The sovereign fund that manages billions of ringgit assets can not act on strategic decisions that seek to improve its fortunes.
A Clean Slate
Yesterday, the government accepted the offer to resign from Azman and the rest of the council members. In making this decision, the Prime Minister's Office (PMO) says it will allow the government to restructure the sovereign wealth fund accordingly.
Dr. Mahathir hailed the resignation offers and said that the resignation of the board members According to the statement, the Prime Minister has the prerogative to appoint the new members of the board of directors of the Fund , to redesign it to other entities and retain certain functions. from among them to allow continuity.
We learn that a decision on such a question will be made quickly. Some said that the two women members of the board of directors would probably be selected for their independence, expertise and diversity.
The other will probably be Mohd Nor, who was the first to resign. He is expected to play a central role if the prime minister keeps him on the board of directors.
Mohd Nor was recently appointed president of Lembaga Tabung Haji by the current government.
Two other names appeared a high position in Khazanah. It is Datuk Mohd Zafer Mohd Hashim, former chairman and managing director of Bank Pembangunan Malaysia Bhd, and former board member of FGV Holdings Bhd.
The other is Datuk Charon Wardini Mokhzani, former vice president of CIMB Group and general manager of the Khazanah Research Institute. Charon is now the Managing Director of the Malaysia Industrial Development Finance Group Bhd.
A source states that the offer of resignation was not a hostile move. "Putrajaya should not be surprised, it was a decision that was not taken in a vacuum
" They knew that the council had to do something to get ahead. Thus, the council decided to make it easier for them and to propose to resign, "explains the source.
A source adds that there have been rumors that the government wanted the board to end its package and that the message becomes more obvious until it is clear that they did not have any other alternative.
"It was discussed and finally the members decided to offer letters of resignation.This is not a hostile movement," says the source.
Dr. Mahathir dispelled the suggestions that the government was on a witch hunt before the council members resigned. "We do not consider everyone guilty of everything, but this administration will not accept any manifest wrongdoing." [19659003] "This compensation action will allow restructuring because our policies are now different. Even though we believe that we have to pay good wages, we can not always base ourselves on commercial rates. We would rather reward with good performance bonuses because some companies may not perform as they should, "said the Prime Minister's Office.
As the government retains some flexibility to retain some board members, the task of finding other people capable of filling vacant positions in Khazanah may not be as difficult as it may be. we think so.
"The massive resignation is definitely a surprise and raises the question of continuity.At the same time, the people who run the show are the management and not the council.The council has legal and fiduciary responsibilities, but the daily operations are not with them.
"We have a brand new group of ministers running the country now. Apart from a small number, none of them has been a minister in the past. Nobody asked if they could do the work or not. They just have to do it. It's the same thing with Khazanah, "says Wan Saiful.
New Direction
One of the main criticisms that the current Khazanah team has been facing has been Dr. Mahathir has criticized Khazanah for being out of step with his initial goals, but there are others who will say that they did what they were asked to do.
Under Azman, Khazanah was to lead the transformation of the GLCs and continue this evolution, focused on achieving profits and delivering financial returns to its stakeholders.Between 2005 and 2017, the value of realizable assets is from RM 63.7 billion to RM 157.2 billion .The adjusted net worth, which measures the impairment loss, amounted to RM115.6 billion at the end of 2017 against RM40.5 billion. ten years ago.
He wrote new policies and published color-coded books on what it was necessary to do. area for processing other GLCs. The returns generated were substantial and after a decade of improvements, the process was declared a success.
In January of this year, Khazanah announced its intention to launch the next wave of its evolution called Transformation 2.0 to stimulate innovation in its businesses.
It is expected that the new five-year program will result in higher returns compared to the returns of the previous program.
All this will be worth nothing now that the government is considering a different path for Khazanah and the role he plays in the economy
He played a strategic role in the development of industries in Malaysia, where he took stakes in some of the iconic projects that the country had undertaken during the phase of industrialization.
an investment company related to the government and must fulfill the mandate given by the government. I would say that no matter the direction of the current government, it's the direction to take, "says Wan Saiful
Khazanah will be kept in its current format, but the direction it will take will be different . A source expects Khazanah to invest in industries that banks are reluctant to finance, but which play an important role in the development of the Malaysian economy.
"These days, it was in heavy industries.In the future, it will be in new industries that will be important in today's industrial revolution", explains a source
History:
PLUS and IHH Healthcare will probably be the main priorities of the fund
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