New Malaysian Government to Review Investment Funds

Malaysian Prime Minister Mahathir Mohamad’s newly established government is set to perform a review of political representation among the country’s biggest government-linked investment funds, as well as the main sovereign and state pension funds.

The six funds released a joint statement that said Mahathir’s government stressed the importance of “separation between professional management of the institutions and any undue interference from political or any other external parties.”

Mahathir took power after the country’s general election held last week.

Malaysia’s largest funds are led by executives that were mostly appointed in the almost decade-long regime of the ousted Prime Minister Najib Razak, though there were no immediate clear indication if any of these executive would be affected by the review.

The funds that will be reviewed include sovereign fund Khazanah, pension fund Employees Provident Fund, investment fund Permodalan Nasional Berhad, retired fund Kumpulan Wang Persaraan, and Lembaga Tabung Haji, which is a fund for the pilgrimage to Mecca.

These funds are controlling billions of dollars in assets, which include huge shareholdings among the country’s biggest publicly traded companies that include banks.

Over the weekend, Mahathir selected a special team, called the ‘Council of Eminent Persons.’ The council is tasked to advise the government regarding economic and financial matters in the coming 100 days.

Zeti Akhthar Aziz, who is the former central bank governor, and Robert Kuok, who is a billionaire tycoon, among others, were included in the team. Former finance minister Daim Zainuddin heads the team.

“For funds that had political representation on their respective board of directors, Daim reaffirmed that this will be reviewed and changed, as required,” the funds stated in a joint statement following their meeting with Daim on Sunday.

In addition, Daim tried to get some feedback from the funds regarding the outlook for the economy, the market, and the ringgit currency.

“Collectively, we agreed that while the market may see some short-term volatility as it factors in changes, the outlook beyond that is positive. We highlighted the emerging consensus of independent commentators that sees this as a historic opportunity to reset the nation’s economy,” they said in the statement.

Daim added that the council will be used to oversee the government-linked funds and companies in order to review the projects and contracts, as well as other issues like toll roads.

Moreover, Daim assured that the council will address all the problems that affect the economy and will not increase the country’s debts.

“We are not going to increase the debt anymore,” he said in an interview on Saturday. “This is a lot of speculation, unnecessary fear. This is a normal reaction when a new government takes over.”

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