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* Proposed resignations due to political pressure
* Khazanah says it will allow a smooth transition under the new government
* PM to decide the leadership of Khazanah – Minister of Finance
* Khazanah MD has been managing the fund for 14 years (Kuala Lumpur, July 26 (Reuters) – Malaysia's Malaysian investment fund of 157.2 billion ringgits ($ 39 billion) from Khazanah Nasional Bhd and l & # 39; his entire board management board has offered to resign in the biggest management upset in state-related businesses since taking over the new government.
Sources told Reuters that the Khazanah's leaders met on Tuesday when the entire council submitted undated letters of resignation to the prime minister.
The decision was made because of government pressure, particularly ap Prime Minister Mahathir Mohamad's public comments called for a change in Khazanah's leadership and leadership, the sources said.
"There is an awareness that things could not continue as they were," said a source familiar with the case that did not want to be identified.
Since his spectacular victory in the May 9 elections, Mahathir has dismantled the leaders of state-owned companies and agencies and has asked his government to reorganize the companies it controls.
In recent weeks, he has replaced the central bank governor and the head of Malaysia's largest fund management company, both appointed by former scandalous prime minister, Najib Razak.
Khazanah said in a statement Thursday that the government would make a final decision on the fund's leadership "to facilitate a smooth and orderly transition under the new government".
He stated that the board of directors "deems it appropriate to offer the new government the discretion and reaffirm the prerogative to form the new board".
Khazanah's portfolio includes more than 100 companies, including Malaysia's second largest bank, CIMB Group Holdings Bhd, utility group Tenaga Nasional Bhd and telecommunications company Axiata Bhd
Azman Mokhtar, general manager from Khazanah. the first half of next year, has already hinted that he can not seek an extension of his contract. Azman led the fund for 14 years.
Speaking to parliament shortly after the announcement of Khazanah, Finance Minister Lim Guan Eng told reporters that Mahathir would rule on the issue now.
"I think it was a wise decision to leave the decision to the Prime Minister," he said, adding that Azman and the position of the board of directors did not make a decision. had not been discussed by the cabinet.
MANAGEMENT CHANGES
Talking about management changes to more state-owned companies, including Khazanah, has been swirling for a few weeks.
Mahathir's coalition took office after voters rejected the ruling party of former prime minister Najib at a historic election in May and promised major structural reforms in companies and organizations. state agencies.
Najib is now the subject of an investigation into the multi-billion dollar scandal of the 1Malaysia Development Berhad (1MDB) state fund.
The previous government used funds from transactions with Khazanah to deal with some obligations of the debtor-laden 1MDB, although the fund declared that it had no control over the debt. use of these funds.
Najib was on the board of directors of Khazanah but resigned after the election. His brother Nazir Razak, also president of the second Malaysian bank, CIMB, remained a member of the board of directors.
In an apparent purge of officials linked to the previous administration, the government replaced the president of Permodalan Nasional Bhd (PNB), the largest fund management firm in Malaysia, last month. He also appointed a new central bank chief in June.
Khazanah took Private Airlines in 2014 as part of a $ 6 billion Malaysian ringgit plan, months after one of the airline's planes disappeared to Beijing and that # 39, another was shot in Ukraine.
The fund also made investments abroad, including real estate projects, US technology companies and Chinese companies. This includes a stake in Alibaba Group before the blockbuster IPO of the e-commerce group in 2014. (1 $ = 4.0460 ringgit) (Report by Liz Lee and Anshuman Daga, Additional Report by Joseph Sipalan, written by Praveen Menon, Editing by Muralikumar Anantharaman, Paul Tait and Michael Perry)
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