Make the Governance of all our GLC World Class at Par with International Standards
At the Special Cabinet Committee on Anti-Corruption (JKKMAR) meeting on 14/5/2019 Tun M announced the candidates who will hold leadership positions in government-linked companies (GLC) and authorities will be vetted first. The candidates will be required to undertake the following:
- Checks through the Malaysian Anti-Corruption Commission’s (MACC) integrity vetting system
- Their bankruptcy status by the Insolvency Department
- Their involvement in any companies
- A declaration of their family members who are either serving in or participating in procurements involving any GLCs, and
- Verifications of their education and qualifications.
In October 2018, Economic Affairs Minister Azmin Ali pledged that politicians will no longer have a place on the boards of government-linked companies (GLC) and only professionals will be entrusted to run them. The GIACC, in April 2019 stated that the government through the Jawatankuasa Khas Kabinet Mengenai Anti-Rasuah (JKKMAR) has directed the Ministry of Ministry to prepare guidelines for the appointment of senior management, chairman and board of directors in GLCs and their subsidiary companies. The GIACC also affirmed that no political appointees should be placed in GLCs. We however note that there is no mention of mechanisms to address issues surrounding political appointments in GLC.
We would like to emphasize that specific mechanisms ought to be put in place to ensure that political appointments can be effective stamped out to prevent corruption and abuse of power. Any appointment to GLC should go through scrutiny by the PAC or a special select committee. The inquiry would allow not just the lawmakers to question the candidates and the GLC in question, but also make the appointment process transparent. All findings from the inquiry should be made public.
Instruct GLCs to galvanize efforts to increase Bumiputera equity holding in the country
11 Feb 2019 – MARA subsidiaries are being consolidated under GLIC Mara Corp after the change of federal government. After the MARA Inc. scandal, leaders stated that “due diligence processes” were completed and issues resolved, stating the intention to continue the development of a “complete ecosystem in Mara’s commercial entities” to uplift the Bumiputera economy.
Improve the corporate governance of GLCs at national or state levels
21 Nov 2018 – Dr. M announced the setting up of an integrity and governance unit (IGU) at all government-linked companies (GLCs) and corporations owned by ministries as well as government departments.
Ensure appointment of GLC Board members based on merit and professionalism, and not politics
Khazanah announces new appointments to Board of Directors
10 June 2019 – Celcom’s former chief special projects officer, Datuk Noor Kamarul Anuar Nuruddin has emerged as a favourite for TM’s CEO, sources told NST.
17 June 2019 – The various state-owned Mentri Besar Incorporated (MBI) companies are not necessary government-linked companies (GLCs) and should be scrapped as they lack transparency and accountability, Professor Terence Gomez said today.
11 May 2019 – However, in one specific area, where much change was expected, little has changed. Pakatan had pledged to reform a well-entrenched government-business institutional framework that had contributed to extensive corruption, debilitating patronage, even a kleptocracy. Umno’s fall was largely attributed to the abuse of 1MDB, Felda and Tabung Haji, institutions known as government-linked companies (GLCs), raising expectations that these enterprises would be reformed. However, what appears to be hampering GLC reform is the matter of consolidating power which is contributing to the perpetuation of the politics of patronage.
9 May 2019 – A month after Pakatan Harapan’s historic win, the government led by Tun Dr Mahathir Mohamad spared no time to reform the nation’s administration and its government-linked companies (GLCs).
16 April 2019 – Malaysia needs to move on from the scandals of yesteryears, while the government continues with the clean-up jobs to build the right foundation for the country to rise up and reclaim the position among the leading economies globally.
31 Mar 2019 – There are no political appointees in government-linked companies, a policy decided by the government. All candidates for the board of directors for statutory bodies are vetted to ensure highly qualified and professional candidates are appointed.
27 Aug 2018 – Following the historical 14th general election, there have been a slew of changes in GLC leadership. Most notable was Tan Sri Zeti Akhtar Aziz’s appointment as chairperson of Permodalan Nasional Bhd (PNB) and Sime Darby Property Bhd, while Datuk Ahmad Nizam Salleh was appointed chairman of Petroliam Nasional Bhd. Most recently, Datuk Shahril Redza Ridzuan was appointed chairman of Khazanah Nasional Bhd after the resignation of the sovereign wealth fund’s entire board.
Politically-appointed heads of GLCs are in focus given that their appointments were made at the pleasure of the previous Government. Many of the heads of GLCs were given board positions as recognition of their services.
Publish annually allowance received by Board members, accessible to public
8 May 2019 – Five GLCs among 20 listed firms with highest-paid CEOs. The five GLCs with the highest-paid CEOs were healthcare firm IHH Healthcare Bhd; financial services companies Malayan Banking Bhd, CIMB Group Holdings Bhd and BIMB Holdings Bhd; and telco giant Telekom Malaysia Bhd.
All GLCs will be required to create a Bumiputera vendor development programs
27 Aug 2018 – (1)“All GLCs will be required to create a bumiputera vendor development programme,” it read. Khazanah has already come under flak from both Prime Minister Tun Dr Mahathir Mohamad and Minister of Economic Affairs Datuk Seri Mohamed Azmin Ali for deviating from its real task to assist in increasing bumiputera corporate ownership.
8 Jan 2018 – MED has partnered Petronas to establish a new vendor-based development programme (VDP) to raise the capabilities of local firms in the oil and gas sector as part of the ministry’s National Entrepreneurship Framework (NEF) launched in November.
To adopt international standards (eg. OECD Guidelines on Corporate Governance of State-Owned Enterprises) to improve GLCs
Set up a Parliamentary Committee to receive regular reports from the Government Investment Division at the Ministry of Finance on the GLCs’ performance
5 April 2019 – GLCs should be answerable to the Dewan Rakyat and be accountable for all the corporate directions and strategies, as part of the current administration campaign for total transparency in administrations and operations.
Former Khazanah Nasional Bhd MD Tan Sri Mohd Sheriff Mohd Kassim said the select committees that are currently being formed at the Parliament should have the jurisdiction to monitor the GLCs and their operations.