This article first appeared in The Edge Malaysia Weekly on December 9, 2019 - December 15, 2019

IT looks like Datuk Shireen Ann Zaharah Muhiudeen will be putting on another hat. The professional fund manager will be joining the board of Khazanah Nasional Bhd, according to multiple sources.

Shireen is currently the chairman of Bursa Malaysia and an independent director of the Federal Land Development Authority. She is also the founder and principal fund manager of Corston-Smith Asset Management Sdn Bhd.

At press time, Khazanah had yet to reply to The Edge’s enquiries on the matter. Meanwhile, Shireen could not be contacted for comment.

Khazanah currently has nine board members, including Prime Minister Tun Dr Mahathir Mohamad, who is the chairman.

The others are Economic Affairs Minister Datuk Seri Mohamed Azmin Ali, Khazanah managing director Datuk Shahril Ridza Ridzuan, former Petroliam Nasional Bhd president Tan Sri Mohd Hassan Marican, Goh Ching Yin, former Bank Negara Malaysia deputy governor Dr Sukhdave Singh, Attorney General’s Chambers head of advisory To’ Puan Azian Mohd Aziz, SenseTime (a leading China-based artificial intelligence company) founder Xiao’ou Tang and Tencent Holdings Company’s top executive Lau Seng Yee.

Since the 14th general election, Shireen has been sought after by the government to take up various roles in government-linked companies (GLCs).

Her vast experience in asset management — she was CEO of AIG Investment Corp (Asia) Ltd between 1992 and 2004, before founding Corston-Smith — has been touted as the reason for her appointment to the boards of the GLCs.

Shireen has a 58.1% stake in Corston-Smith, according to data from the Companies Commission of Malaysia.

As the chairman of the local stock exchange, she is also a member of the Economic Action Council (EAC), alongside Mahathir and his economic adviser, Dr Muhammed Abdul Khalid, as well as Permodalan Nasional Bhd chairman Tan Sri Zeti Akhtar Aziz, Cabinet ministers and other prominent figures.

In announcing her appointment as chairman of Bursa, the stock exchange said Shireen had more than 31 years of focused fund management experience in emerging Asia equity markets.

“She was a member of the International Finance Corporation’s working group for the establishment of the Philippine Stock Exchange’s Maharlika Board. She was also a member of the International Advisory Panel for Labuan International Business and Financial Centre,” the statement read.

On July 1, Shireen stepped down as independent non-executive director of AMMB Holdings Bhd as her tenure, as approved by Bank Negara Malaysia, expired on June 30 and due to her time commitment as a member of the EAC.

At Bursa, she works with CEO Datuk Umar Swift Abdullah. However, rumour has it that they have different views on how to run the exchange, which recently flattened its organisational structure and made three top posts — chief commercial officer, chief regulatory officer and chief operating officer — redundant.

Umar said the new structure will make Bursa a more agile and efficient organisation to better meet the changing needs of customers and other stakeholders, considering the evolving market conditions.

Meanwhile, some quarters have questioned whether the appointment of an asset management company’s founder to the board of the stock exchange would lead to a conflict of interest.

Khazanah dropped a bombshell earlier this year when it announced its first pre-tax loss in 13 years for 2018, amid significant impairment provisions — a big chunk of which was due to Malaysia Airlines Bhd (MAB).

The government-linked investment institution posted a pre-tax loss of RM6.3 billion last year — compared with a pre-tax profit of RM2.9 billion in the preceding year — after booking an impairment totalling RM7.3 billion. The impairment, which was more than triple the RM2.3 billion seen in 2017, was made to clean up its books.

The last time Khazanah dipped into the red was in 2005 when it reported a pre-tax loss of RM831 million.

“Looking ahead into 2019, Khazanah should be able to return to profit, given the fact that the clean-up we did in 2018 has gone through the books. We don’t expect any more large impairments that we have to go through again in 2018.

“The provisions are primarily due to MAB, which accounted for roughly half of the total impairment for 2018,” Shahril was quoted by the media as saying.

At the same time, there is speculation that Shahril may not remain as managing director after completing his task to restructure Khazanah, including hiving off some assets earmarked as strategic assets.

He has been speaking out against the purported plan to sell PLUS Expressways Bhd to the private sector, saying it would be a huge moral hazard as the highway operator is seen as a strategic national asset.

He was appointed to his current position, with a three-year contract, in August last year. Prior to that, he was CEO of the Employees Provident Fund since April 2013.

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