Friday 29 Mar 2024
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This article first appeared in The Edge Financial Daily on January 15, 2020

KUALA LUMPUR: The mismanagement of government-linked companies (GLCs) is among the reasons why the government insists on having golden shares in some of them, said Prime Minister Tun Dr Mahathir Mohamad.

The golden share gives the government special veto powers in a GLC, such as overruling the appointment of top management positions. This allows the government to exert control on these companies, if needed.

“There are reasons why the government insists on having the golden share. But if we find that it is not necessary, we will do away with it. But we have to see each case one by one,” Dr Mahathir said.

“Sometimes companies [are meant to do] something [but] they veer towards another thing. For example, as you see in 1MDB, it did not do what it had promised to.

“So, in such a case, the government needs to take over,” Dr Mahathir told reporters at the Bank Rakyat Integrity Forum 2020.

Dr Mahathir was commenting on a recommendation made by Khazanah Nasional Bhd managing director Datuk Shahril Ridza Ridzuan during a panel session at the forum for the government to do away with the golden share mechanism.

Shahril said the mechanism is no longer needed as GLCs can be regulated via industry regulators rather than by direct intervention in the company’s management, which could be detrimental to the company’s way of doing business.

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