Make accounts of state firms public, academic says

Menteri Besar Selangor Inc was established to administer the assets and investments of the state government.

GEORGE TOWN: An academic has urged state governments to reveal the accounts of subsidiaries such as the Menteri Besar Inc (MBI) or Chief Minister Inc (CMI) to ensure transparency of transactions to taxpayers.

Political economy professor Terence Gomez said such government-linked companies (GLCs) are fully controlled by menteris besar and chief ministers, leading some to consider these their “personal fiefdoms”.

He said the recent news that Penang CMI is free from audit or any sort of public scrutiny showed how opaque these GLCs can be.

“I am not singling out Penang or Selangor, but all states – including PAS’ Kelantan, Umno-ruled states and even Warisan-led Sabah.

A list of CMIs/MBIs in Malaysia. (Source: IDEAS study titled ‘Government in Business: Diverse Forms of Intervention’ under the Malaysia GLC Monitor, released last August)

“GLCs should not be opaque. They should be open books and in the public eye, simply because they are government-linked enterprises,” he told FMT.

Gomez, who is a senior fellow at the Institute for Democracy and Economic Affairs, said his research on GLCs showed that none of the MBIs or CMIs from the 13 states had ever revealed their accounts.

He added that chief executives of the state can make decisions on joint-ventures or distribution of contracts without consultation, including with state exco members.

“The concentration of power in the menteri besar or chief minister’s office (in CMIs and MBIs) is not in keeping with open and transparent governance,” he said.

“If everything is really above-board in MBIs and CMIs, they should release all their transactions in the spirit of transparency and accountability.”

A comparison of five MBIs and CMIs in the country. (Source: IDEAS study titled ‘Government in Business: Diverse Forms of Intervention’ under the Malaysia GLC Monitor, released last August)

Calling for a systemic review, he said there is no need for these GLCs in the first place as state economic development corporations (SEDCs) such as PKNS in Selangor and PDS in Penang are good enough.

Such corporations are also headed by the menteri besar or chief minister but include checks and balances through federal bureaucrats sitting as board members to ensure coordination between the state and central government, he said.

He also dismissed claims that red tape at SEDCs hinders investments, saying this too is there as a form of check and balance.

“In the New Malaysia, we should have a new system to ensure accountability and transparency,” he said.