GEORGE TOWN: MCA deputy president Wee Ka Siong today questioned the need to restructure sovereign wealth fund Khazanah Nasional.
Wee questioned Economic Affairs Minister Mohamed Azmin Ali’s reasoning for the need to put the fund back on track, saying the latter had neglected to mention the billions of ringgit gained by Khazanah from investments.
Wee also said Azmin seemed unaware of Khazanah’s role in cushioning the losses accumulated by Malaysia Airlines.
“The single failed investment into an online lingerie business from India is all he has selectively shown interest in.
“Even this investment had not been written off or failed as the company had just announced its best ever quarter and is still the market leader in its segment,” he said in a statement today.
Azmin had told the Dewan Rakyat earlier this week that Khazanah had made several bad moves that caused it to lose millions, including investing in an online lingerie company which saw losses of US$20 million (RM80 million).
He had also said the government wanted to put Khazanah “back on track” so that its strategic assets were properly managed.
Wee said online shopping platforms matched the definition of “new growth areas”, and that one such early business model in Malaysia was Zalora, which also started by solely selling clothes.
He cited investments in Alibaba Group Holdings, another successful online shopping platform, which yielded RM6 billion in gains.
“Based on these past experiences and the existing market trends, the decision to invest in a similar platform in India is a sound one.
“Moreover, India is a booming digital market, and short-term losses do not necessarily erase the possibilities of long term gains.
“Hence, what exactly warrants a restructuring of Khazanah Nasional?” Wee asked.
The Ayer Hitam MP also pointed out that the investment fund had appreciated 343% in value over 10 years, with Khazanah valued at RM33.7 billion at the end of 2008, but this has since more than tripled to RM115.6 billion last year.
“That is an increase of RM82 billion in net worth in just a decade. Khazanah had excelled under ‘the worst finance minister in Asia’ (referring to former finance minister Najib Razak), outperforming itself during (Prime Minister) Dr Mahathir Mohamad’s time,” he said.
Wee then asserted that Mahathir’s “self-appointment” as chairman of Khazanah, and the omission of the finance minister in the selection of the board of directors, was highly questionable.
“When Mahathir snatched Khazanah from the hands of our finance minister, we cannot help but question if the Cabinet had contended his autocratic move, or simply rolled over?
“Has the Cabinet actually debated Mahathir over his takeover of Khazanah’s leadership, and on what basis did they agree to his self-appointment?
“At least the appointment of Shahril Ridzuan as managing director makes sense; the Employees Provident Fund (EPF), under his direction, managed to yield an average annual dividend of 6.42% — much unlike the rampant crony-capitalism phenomenon under Mahathir’s time, where he bailed out mismanagement after mismanagement using money from Khazanah,” Wee said.
The prime minister recently played down criticisms over his appointment as chair of Khazanah, stating he is trying to put the sovereign wealth fund back on the right track.