The board resignation of Malaysia’s sovereign wealth fund Khazanah Nasional Bhd will allow the newly-elected government led by prime minister Mahathir Mohamad to restructure the sovereign wealth fund accordingly, said the Prime Minister’s Office in a statement issued today.
In welcoming the offers of resignation from the entire board, Mahathir said the board members’ resignation is a move to “clear the deck to allow the government to restructure it” in line with policies of the new administration.
He stressed that it is the prime minister’s prerogative to appoint the fund’s new board members, re-designation to other entities and to retain some of them to allow for continuity, adding that the government is not on a witch-hunt.
“We do not regard everyone as guilty of everything, but this administration will not accept obvious wrongdoings. This action of clearing the deck will allow restructuring as our policies are now different. While we believe in paying good salaries we cannot all the time base it on commercial rates.
“We would rather focus on rewarding with good bonuses tied to performance as some companies may not perform as they should,” said Mahathir.
Khazanah has confirmed the news that its board members, including managing director Azman Mokhtar, have offered to resign from their positions to facilitate a smooth and orderly transition under the new government.
The resignation came after Mahathir chastised the fund, saying it has “deviated from its core purpose of assisting bumiputras”. Khazanah’s board members include former prime minister Najib Razak’s brother and CIMB Group chairman Nazir Razak.
Since the national elections held on May 9, government-linked investment corporations have been actively reviewed by Mahathir, starting with the setting up of a Council of Eminent Persons to advise the government on matters pertaining to economic and financial matters.
Last month, Malaysia’s $69-billion state-linked fund management firm Permodalan Nasional Bhd saw the replacement of its group chairman by former central bank governor Zeti Akhtar Aziz.