This article first appeared in The Edge Financial Daily on July 27, 2018

KUALA LUMPUR: Khazanah Nasional Bhd said yesterday that all its board members, including managing director Tan Sri Azman Mokhtar, have offered to resign from the board.

In a brief statement, the government’s sovereign wealth fund said this was done in order to facilitate a smooth and orderly transition under the new government.

“The current board has been honoured to serve, and feels it appropriate to offer the new government the discretion and reaffirm the prerogative to form the new board. We will issue a further statement once we have further details of the reconstitution of the board,” it added.

This followed news reports that Azman and eight other members of Khazanah’s board have submitted their resignations to the government.

Citing senior government officials and financial executives close to the situation, Singapore’s The Straits Times said Azman and the Khazanah directors held a special board meeting late on Tuesday afternoon and decided to sign undated resignation letters that were subsequently submitted to Prime Minister Tun Dr Mahathir Mohamad’s administration.

“The officials said the meeting, which was chaired by Khazanah executive committee chairman Tan Sri Md Nor Md Yusof, reached the unanimous decision that [Dr] Mahathir’s new Pakatan Harapan coalition government, which won the May 9 general election, should be allowed to determine the new leadership structure at the sovereign wealth fund.

“The move to submit the undated letters was intended to give Dr Mahathir the final say on who should remain or leave Khazanah, which is modelled after Singapore’s Temasek Holdings,” the report quoted financial executives and government officials close to the situation as saying.

Apart from Azman and Md Nor, Khazanah’s other directors are former banker Tan Sri Mohamed Azman Yahya; Datuk Mohammed Azlan Hashim; former central banker Tan Sri Andrew Sheng Len Tao, who previously served as the deputy chief executive of the Hong Kong Monetary Authority; Tan Sri Raja Arshad Raja Uda, former chairman and senior partner at PricewaterhouseCoopers in Malaysia; Datuk Seri Nazir Razak, chairman of financial group CIMB Group Holdings Bhd; Datuk Nirmala Menon, a highly respected insurance sector executive; and banker Yeo Kar Peng.

The report said speculation about a shake-up at Khazanah was triggered two weeks ago when Dr Mahathir publicly chastised the sovereign wealth fund, which he founded in 1994 during his first stint as prime minister.

It said Dr Mahathir claimed that Khazanah had deviated from its original objectives and had become a convenient vehicle for the previous government to reward politicians and non-professionals with positions and lucrative compensation packages.