KUALA LUMPUR: The resignation of Khazanah Nasional’s managing director and board members will enable the government to restructure the sovereign wealth fund, said Malaysia Prime Minister Mahathir Mohamad.
He 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.
"It is the Prime Minister’s prerogative to appoint the fund’s new board members, move existing members to other entities or retain some of them to allow for continuity," he said in a statement on Friday (Jul 27).
On Thursday, Khazanah Nasional confirmed news reports that all its board members, including the managing director, had offered to resign.
In a statement, the fund said this was to facilitate a smooth and orderly transition under the new government.
Dr Mahathir said in his statement 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 to take place 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,” he explained.
On reports that Khazanah Nasional's key stocks plunged on Bursa Malaysia following the resignations, losing about RM2 billion (US$492.5 million) in combined market value, Dr Mahathir said the amount is nothing compared to the burden of a RM1 trillion debt that his administration inherited from the previous government.
“The amount of debt is real, the amount needed to service the debts is real. And most of the amounts ‘invested’ by the previous administration has yet to be recovered as we do not know where they have been ‘invested’,” he said.
Dr Mahathir also took a swipe at former prime minister Najib Razak over the latter's remark that Pakatan Harapan policies would bring the country to "a bygone era".
Prime Minister Mahathir noted that the bygone era was when Malaysia was known as an "Asian Tiger".
The term refers to several Southeast Asian countries that enjoyed a robust economy in the 1990s before it all came crashing down during the Asian financial crisis.
Dr Mahathir asked if Malaysians would prefer to return to the era of Najib's administration when he helmed the country as prime minister. He said: "Is he saying that the people should be taken back to the era when the nation was known as a kleptocracy led by a kleptocrat?"
According to reports, Najib made the remark in parliament on Thursday.