Malaysia: Najib’s hold on finances ‘helping him stay in power’ – 25 Sep 2017

  • According to a new book titled Minister Of Finance Incorporated by Universiti Malaya’s Professor Edmund Terence Gomez, Datuk Seri Najib Razak not only has legitimate far-reaching powers enshrined in the management structures of these corporations, his ability to influence where their funds flow serve to entrench his position within ruling party Umno.
  • In Malaysia, where the Prime Minister is also the Minister of Finance – an arrangement introduced by former prime minister Mahathir Mohamad – Mr Najib has oversight of trillions of ringgit in government assets.
  • The EPF Act, for example, allows the finance minister to give general direction to the board, whose members, along with those of the powerful investment panel, are decided by him. Similar provisions vesting control in the executive arm, and even explicitly in the prime minister, are littered across Malaysia’s government bodies.
  • Mr Najib’s dual role as Prime Minister and Finance Minister gives him ultimate say over seven holding firms, which Putrajaya calls “government-linked investment companies” (GLICs).
  • The assets under the seven GLICs amounted to 42% of the local bourse’s MYR1.7tr market value as of 2013, according to Prof Gomez. At the apex of the structure of Malaysia’s government-linked investment companies, or GLICs, sits the Minister of Finance Incorporated, or MoF Inc.
  • This entity has no board of directors as it represents the Finance Minister as a body corporate. Malaysia’s Prime Minister Najib Razak is also the country’s Finance Minister.
  • Despite Mr Najib promising in 2010, soon after he came to power, that government presence in business would be reduced, the opposite has happened. The GLCs have become bigger players in Malaysia’s corporate sector.
  • According to Mr Wan Saiful, the GLCs acquired MYR51.7bn of assets between 2011 and 2015, while disposing MYR29.5bn. And during the same period, the government’s share of the Kuala Lumpur Composite Index – which tracks the performance of the bourse’s top 30 firms – increased to 47.1%, from 43.7%.

External Link : http://www.straitstimes.com/asia/se-asia/najibs-hold-on-finances-helping-him-stay-in-power

25-Sep-2017


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