KUALA LUMPUR: The days of top executives of government-linked companies (GLCs) drawing fat salaries – regardless of their companies’ performance – are over, Malaysia Prime Minister Mahathir Mohamad has said.
He said what happened in the past was that the government "found it convenient" to place its supporters in these GLCs, and these executives got a good income from the companies.
“The result is that we have a lot of people who are non-professionals and unfamiliar with business, but holding high posts in the GLCs, and this, of course, defeats the whole purpose," Dr Mahathir said in an interview with Hong Kong-based news portal Investine published last week.
He added: "The GLCs inevitably lose money, but the salaries of these people (are) very high and they enjoy all this without bothering whether the company makes a profit or not."
The prime minister said that the Pakatan Harapan government now wants to place professionals in these GLCs, however, their salaries "will not be very high".
"The salaries may be slightly higher than that of the civil service, but if they perform, then we'll pay them a bonus. Otherwise, they won't receive the high income as currently, and we will change the management so that we appoint professionals," Dr Mahathir said.
He also said that it did not matter whether "they are party people or not", but it was key that they are professionals who fit in the business of the company.
GOVERNMENT TO STUDY SHARES HELD BY KHAZANAH
During the interview, Dr Mahathir also spoke at length about the concept of GLCs and Khazanah Nasional Bhd, the strategic investment fund of the Malaysian government, which he set up in the 1990s when he was prime minister for the first time.
He said the idea was prompted by "an apparent inability of the Malays to retain shares" acquired under the government's affirmative action.
"When they get their shares, they inevitably sell them all and then they go back to having no shares. That way they enrich the very people that they are supposed to chase after.
"So, we thought that instead of giving directly to the Bumiputeras, we'll create a body that can hold the shares until such time when they have the capacity to retain those shares.
“That was the original intention, but along the way, Khazanah decided that it should take all the shares for itself and if they are good shares, why not acquire the shares at the time of listing when the price was very low.
“And so they forgot entirely about holding the shares for the Bumiputeras," he added.
Instead, Khazanah decided that it should hold the shares forever as part of the companies owned by the government.
The prime minister said the government then no longer followed the initial intention of the formation of Khazanah.
He said the government will have to go through the huge number of companies that Khazanah has shares in and categorise them into the ones that could be profitable, might be profitable and those that might be losing money.
"We need to talk about closing some of these companies to reduce the overall number and to a certain extent go back to the original intention of holding the shares allocated to the Bumiputeras until such time when they can buy," said Dr Mahathir.