Sell down sparks concern of return to Mahathir era

By Lee Wei Lian, The Malaysian Insider

The Najib administration’s decision to sell down stakes in government-linked companies (GLCs) has triggered talk that these entities would end up concentrated in the hands of politically-connected businessmen.

The country is still suffering a hangover from the days of the Tun Dr Mahathir Mohamad administration which embarked on a raft of privatisation projects such as highways and the military shipyard in Lumut to the politically-connected elite.

But as Datuk Seri Najib Razak’s government attempts to cut back on the government’s exposure to Khazanah Nasional’s investments, The Malaysian Insider understands that there is talk of politically-connected businessmen lobbying to take over these investments, in a mirror of what happened during Dr Mahathir’s time.

This week, Khazanah Nasional placed out two per cent of the stock of power utility Tenaga Nasional in a move aimed at drawing foreign funds back to the laggard stock market.

Khazanah raised RM704.7 million after placing out this week about 87 million shares in Tenaga, the country’s 6th-largest company by market capitalisation.

The Tenaga placement came after Khazanah’s recent sale of 92 million shares in PLUS Expressways. The state fund owns more than half of PLUS.

With foreign ownership of Malaysian stocks standing at slightly above 20 per cent, fund managers and analysts said that the move would draw back foreign funds, who deserted the Malaysian market during the credit crunch.

But local players are also waiting in the wings.

Asas Serba, a little-known company rumoured to be linked to Tan Sri Halim Saad, had in October proposed a RM50 billion takeover of the nation’s toll concessions and there is now speculation that other businessmen close to Halim and former Finance Minister-cum-business tycoon Tun Daim Zainuddin are keen on privatising various other government entities and GLCs.

While neither Daim nor Halim have surfaced so far, according to sources, people close to them have made the case for privatising the toll concessions to the country’s top leaders and influential personalities.