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This article first appeared in The Edge Malaysia Weekly on June 11, 2018 - June 17, 2018

A new broom sweeps clean. Less than a month after the Pakatan Harapan government was formed, the pace of the leadership shake-out at public institutions and government-linked companies (GLCs) has been astonishing.

In a recent interview with The Edge, Prime Minister Tun Dr Mahathir Mohamad said it is a much more challenging task for him to form a new government now, compared with when he became the prime minister for the first time in 1981.

“There are so many political appointees. Government departments were set up to serve the political party, not the country ... All these [appointees], we have to get them out,” he said.

Judging from his remark, more heads are likely to roll in the first 100 days of the change in government.

The five-member Council of Eminent Persons has been meeting the heads of public departments and institutions, including the Federal Land Consolidation and Rehabilitation Authority (Felcra) and the Federal Land Development Authority (FELDA), in the past weeks. Many see this as an exercise in leaving no stone unturned to ensure that only capable and trusted persons come on board.

It is certainly necessary to remove the political appointees. But by the same token, this raises the question as to whether the process could result in the unintentional removal of capable people along the way, and innocent bystanders falling victim to the shake-out.

If one were to hazard a guess as to the names on the watch list, Tan Sri Abdul Wahid Omar, the chairman of Permodalan Nasional Bhd (PNB), is one. There is also wide speculation about the positions of the Employees Provident Fund CEO Datuk Shahril Ridza Ridzuan and Khazanah Nasional Bhd managing director Tan Sri Azman Mohktar.

Abdul Wahid was seconded from Malayan Banking Bhd, where he was the CEO, to be a minister in the Prime Minister’s Department in June 2013. He is one of the young professionals, including Khazanah’s Azman, a former analyst, Datuk Seri Che Khalib Mohd Nor and Datuk Shahril Ridza Ridzuan, who were tasked with reforming the GLCs when Tun Abdullah Badawi became prime minister in 2003.

Abdul Wahid caught the attention of the politicians when he released a statement on why the Goods and Services Tax (GST) should be maintained and how the implementation of the Sales and Services Tax would be regressive. His argument does hold water, but the timing of the statement raised eyebrows as it was made two days before GE14.

That said, Abdul Wahid has made a real contribution over the years. Currently, he is pushing for greater transparency at PNB, the country’s largest asset management firm, starting with issuing its first-ever annual report for the financial year ended Dec 31, 2017. Governance and transparency have always been issues at PNB.

Abdul Wahid and PNB CEO Datuk Abdul Rahman Ahmad kick-started PNB’s six-year STRIVE-15 plan, up to 2020, which involves a string of major corporate exercises to unlock value in the fund’s investments, including the demerger of UMW Oil and Gas Bhd from conglomerate UMW Holdings Bhd and the listing of Sime Darby Bhd’s plantation and property businesses.

The spate of resignations kicked off on May 14, the first working day after GE14. Tan Sri Shahrir Abdul Samad stepped down as chairman of FELDA and Tan Sri Dzulkifli Ahmad resigned as the chief of the Malaysian Anti-Corruption Commission (MACC).

On the same day, Tan Sri Irwan Serigar Abdullah’s contract as Treasury secretary-general was cut short to June 14 and he was subsequently transferred to the Public Service Department.

About a week later, Tan Sri Apandi Ali was let go as attorney-general, shortly after being told to go on leave. He had taken over the post from Tan Sri Abdul Gani Patail in July 2015.

Datuk Seri Abdul Azeez Rahim gave up his chairmanship of pilgrim fund Lembaga Tabung Haji, as well as listed companies Brahim’s Holdings Bhd and Seni Jaya Bhd.

Further, Bank Negara Malaysia governor Tan Sri Muhammad Ibrahim relinquished his post last Wednesday, barely two years after he was appointed in April 2016.

His reason for leaving has become the talk of the town. “I am prepared to relinquish my post if I no longer have the strong trust and support of the public. I cannot in good conscience continue if it affects the bank’s image and reputation,” he said in his letter to the employees of the central bank.

Muhammad’s resignation came two weeks after Finance Minister Lim Guan Eng confirmed on May 24 that the Barisan Nasional government had bailed out 1Malaysia Development Bhd through funds raised via Bank Negara’s purchase of a 22.58ha piece of land for RM2.066 billion in January and a RM3 billion redeemable cumulative convertible preference shares (RCCPS) issue by Khazanah Nasional Bhd.

However, Muhammad pointed out in the letter that it was not the first time Bank Negara had acquired pieces of land to enable the discharge of its mandates. He highlighted that the site of the central bank’s headquarters in Jalan Dato Onn involved three separate land acquisitions made in the 1950s and 1980s.

He cited the example of the Bukit Perdana land that the central bank had bought at RM1,235 per sq ft in 2013, noting that the transaction price was based on an independent professional valuation. The land purchase was done during his predecessor Tan Sri Dr Zeti Akhtar Aziz’s tenure at Bank Negara. She is now on the Council of Eminent Persons.

He dismissed the accusation that the most recent land purchase was made to intentionally aid and abet the misappropriation of public funds pertaining to the corruption and scandal surrounding 1MDB as “totally untrue”.

“Bank Negara would never be a party to any such activities that would betray the public trust in us. We abhor any semblance of corruption and abuse of power. Sceptical as many may be, the [central] bank did not know, nor did we have any control over the proceeds of the land purchase that would be used to settle 1MDB’s obligations. It is simply unthinkable for us to be associated with such a controversial entity mired in accusations of fraud and mismanagement,” said the former governor, who had been with the central bank for 34 years, since 1984.

Over at the GLCs, Datuk Seri Mohammed Shazalli Ramly announced his resignation as managing director and group CEO of Telekom Malaysia Bhd (TM) last Wednesday as well. The telco’s deputy group CEO, Datuk Bazlan Osman, is the acting group CEO for the time being.

Shazalli is considered Datuk Seri Najib Razak’s image guru and played a pivotal role in Barisan Nasional’s branding in GE14.

Quoting sources, Reuters reported that Putrajaya is looking to replace Bursa Malaysia CEO Datuk Seri Tajuddin Atan before his term ends in March next year. However, Mahathir told the media after a Cabinet meeting that there has yet to be any discussion on replacing Tajuddin.

That said, Bursa announced last Thursday that it has hired Samuel Ho, a former senior executive at Hong Kong Exchanges & Clearing Ltd, as deputy chief executive of Bursa Malaysia Derivatives Bhd from next month.

Over at Petroliam Nasional Bhd (Petronas), independent non-executive director Datuk Mohd Omar Mustapha has confirmed that he had tendered his resignation on June 1 and that it is pending acceptance. He joined the national oil company in September 2009.

In a brief email to The Edge Financial Daily last week, Mohd Omar said he had given notice of his resignation as director, as well as chairman of Petronas’ remuneration committee effective June 30.

Petronas chairman Tan Sri Mohd Sidek Hassan is expected to leave Petronas’ board as well.

It is worth noting that both Tajuddin and Mohd Sidek were involved in the Royal Commission of Inquiry (RCI) to investigate Bank Negara’s foreign currency transaction losses in the 1990s, which put the spotlight on Mahathir as he was the prime minister at the time. Mohd Sidek chaired the committee and Tajuddin was a member.

In August last year, Mahathir filed a leave application to initiate a judicial review to disqualify Mohd Sidek and Tan Sri Saw Choo Boon from sitting as RCI chairman and a member respectively in view of their positions as members of a task force responsible for the investigation.

Other members of the RCI were Malaysian Institute of Accountants member K Puspanathan and the Finance Ministry’s Department of Strategic Investment secretary Datuk Dr Yusof Ismail. 
 

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