PETALING JAYA: Prominent banker Nazir Razak said the new government, together with multiple stakeholders, should review the current framework of government-linked companies (GLCs) and government-linked investment companies (GLICs).
Speaking to FMT, Nazir, who is CIMB Group Holdings Bhd chairman, said the existing framework evolved from the Asian Financial Crisis and covered strategic companies established by the government such as Malaysia Airlines, Tenaga Nasional and Telekom Malaysia (TM), and new ones such as UEM and Celcom.
“GLC reforms to improve leadership, performance, and governance were successful with very few exceptions.
“I knew these companies before the reforms and witnessed tremendous improvements. Not perfect, but so much better.”
He was commenting on criticism of Malaysian GLCs, including a call by US-based Malaysian critic Dr M Bakri Musa who proposed that the Pakatan Harapan government do away with GLCs altogether.
Nazir said some companies had fully “graduated” and the role of the government was merely as a shareholder, so perhaps they need not even be called GLC’s.
He was referring to the 10-year Khazanah Nasional-led reform programme, which was completed in 2015, and involved the likes of Axiata, CIMB, Sime Darby, UMW and TM among others.
“Unfortunately, some GLC’s like Felda and 1MDB were not part of the Khazanah-led reform programme.”
He added that in reviewing the GLC framework the government should redefine Permodalan Nasional Bhd and the Employees Provident Fund as they were directly held in trust for the people.
He also said the government should look into the issue of GLCs crowding out the private sector.
“The government would need to decide on whether companies like Malaysia Airlines and Tenaga are strategic and must always be a GLC.”
Another issue that needed to be looked into, he said, were the rules governing GLCs, such as whether politicians should be barred from being part of GLC boards.
Previously, Prime Minister Dr Mahathir Mohamad said government-linked companies had become “monsters”, deviating from the original noble intention of helping the poor.
Dr Mahathir said GLCs had become so unsupervised and huge that they could not be controlled to follow policies backed by the government.