This article first appeared in The Edge Financial Daily on November 3, 2017

KUALA LUMPUR: An internal leadership succession plan at Khazanah Nasional Bhd is at risk, due to some powerful lobbying by external candidates hoping to succeed managing director (MD) Tan Sri Azman Mokhtar, according to a report by The Straits Times.

Azman, who has been leading Khazanah since 2004, intends to leave to make way for new blood at the sovereign wealth fund, it wrote, citing sources. His contract is set to expire at end-May 2019. He is supposed to pick a deputy from Khazanah’s senior ranks before the end of this year, who would then shadow him for a year before Khazanah’s board approves the chosen as the new chief, the report wrote.

Front runners for the deputy MD post are the fund’s two executive directors, Datuk Hisham Hamdan and Ahmad Zulqarnain Onn, it said. “The Khazanah duo are now facing competition from Tengku Datuk Seri Zafrul Abdul Aziz, who is group chief executive officer (CEO) of CIMB Group Holdings Bhd, the country’s second largest financial institution, and Arul Kanda Kandasamy, president and CEO of scandal-scarred 1Malaysia Development Bhd, Khazanah sources and government officials said,” the Singapore daily wrote.

The report said senior politicians and well-connected business people close to Tengku Zafrul and Arul Kanda are lobbying Prime Minister Datuk Seri Najib Razak who, as Khazanah’s chairman, would have the final say on who replaces Azman. The panel overseeing the leadership succession in Khazanah was, until recently, headed by its former deputy chairman Tan Sri Nor Mohamed Yakcop, who resigned from the post in September on completion of a Royal Commission of Inquiry into some multibillion-ringgit worth of losses suffered by Bank Negara Malaysia due to foreign exchange trading in the 1990s. Citing senior Khazanah sources, the report said the departure of Nor Mohamed, who was a strong advocate for Azman’s replacement to come from within Khazanah, could strengthen the push by groups with vested interests to get an outside candidate.