Thursday 28 Mar 2024
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KUALA LUMPUR (Oct 10): Pointing out that Khazanah Nasional Bhd had been profitable during Barisan Nasional’s administration, former premier Datuk Seri Najib Razak today blamed the Pakatan Harapan Government for the sovereign wealth fund’s performance last year when it slipped into the red.

“We never lost money, but for the first time (in 2018), Khazanah lost RM6.3 billion. That is something that they (PH) cannot deny,” the Najib told reporters at Parliament lobby.

In fact the RM6.3 billion pre-tax loss was the result of a RM7.3 billion impairment provision, half of which was due to Malaysia Airlines Bhd, which Khazanah nationalised in 2014 after paying RM1.4 billion for the remaining 30% stake it did not own.

If the impairment for Malaysia Airlines had been made in 2017, Khazanah would have slipped into the red in that year, as its impairment would have risen to nearly RM6 billion and not just the RM2.3 billion it booked. The larger impairment would have wiped out the RM2.896 billion pre-tax profit reported for 2017, back-of-the-envelope calculations show.

Najib today also denied that Khazanah’s divestments were necessary because of the mistakes made by the BN Government.

“No, the divestments were not because of the BN Government. It was due to two reasons. One was that they overestimated the oil price at US$70 per barrel as it is not realistic. Today Brent crude is about US$55, so that itself is already a wrong estimation.

“Secondly, it was because of their mistake to abolish the GST (goods and sales tax), and replace it with the SST (sales and services tax), which resulted in a revenue shortfall of up to RM24 billion a year. All these put pressure to the Government’s revenue, forcing them to divest the country’s assets. This is not because of the BN Government,” he said.

“If BN is still running the Government, I guarantee that we will not take the measure to divest strategic assets, like Duo Residence in Singapore and IHH (Healthcare Bhd),” he said.

Najib said although during his tenure as Prime Minister, Khazanah divested 84 assets, the value of the divestments was lower compared with the value of assets sold recently by the fund.

“The Minister of Economic Affairs said I had sold 84 assets during my tenure of nine years and four months, but he did not mention the value, only the number of assets. If we use Kadir Jasin’s (veteran journalist Datuk A. Kadir Jasin) figure, he said the total value of assets sold was RM45.3 billion, or RM5 billion a year.

“The PH government sold 12 assets in their first year of running the government, worth RM25 billion, so in one year, they sell five times more than the BN administration. We divest non-strategic assets and buy strategic assets, so Khazanah’s overall assets increased,” he said.

Najib said under BN Government, Khazanah’s net asset grew 3.5 times from RM33 billion to RM116 billion.

“Under PH rule, Khazanah’s net assets dropped by RM25 billion, from RM116 billion to RM91 billion,” he said.

Earlier today, Economic Affairs Minister Datuk Seri Mohamed Azmin Ali said asset divestment is not something extraordinary for an investment fund like Khazanah, and revealed that the fund had divested 84 assets during Najib’s tenure as Prime Minister.

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