Audit prompts Khazanah to reshuffle Iskandar unit

By The Malaysian Insider

KUALA LUMPUR, Oct 2 — Results of an internal audit has pushed Khazanah Nasional Berhad to change the leadership in its flagship developer Iskandar Investment Berhad (IIB), with DRB-Hicom property chief Datuk Syed Mohamed Syed Ibrahim to replace current chief executive Arlida Ariff this December.

The Malaysian Insider understands that Khazanah and Arlida have mutually agreed that her contract will not be extended. It is also learnt that Syed Mohamed will be named as the CEO soon.

“There is a mutual agreement that Arlida’s contract will not be renewed,” a government official told The Malaysian Insider.

However, he could not say if the sovereign wealth fund would press charges against anyone following the audit in the company that acts as a catalyst for Malaysia’s massive development in Johor.

Khazanah initiated an audit into the financial management and operations of IIB earlier this year following reports of alleged kickbacks, inflated costs and alleged questionable procurement procedures.

“The allegations were serious that the Khazanah boards called for an internal audit undertaken by Ernst & Young,” a source said.

The Sun newspaper yesterday reported that some of these allegations include the awarding of infrastructure projects to relatives of senior executives of IIB.

However, it is understood that Khazanah is not keen to pursue a full-blown investigation involving the authorities.

“Khazanah’s main concern is investor confidence but if there are any allegations of irregularities, they must be nipped in the bud,” The Sun quoted its sources as saying.

The daily however stressed that the change does not implicate Arlida, who was headhunted by Khazanah and named as CEO and president in 2008 to replace the company’s first chief executive, Dr Iskandar Ismail.

Arlida first joined IIB in 2007 from her job as executive director of KLCC Projeks Sdn Bhd.

IIB was founded in November 2006 as the South Johor Investment Corporation and has since brought in a total of RM39 billion worth of investment — both signed and pledged — including the RM750 million Lego Land theme park.