Spore PM Lim Kuan Yew admitted openly that in order to attract the best talents to enter politics, he had to give them assurance of govt appointments with salaries comparable to what the corporate sector was paying its top executives. The quid pro quo was that they had to be super clean and free from all suspicions while holding ministerial posts.
In Singapore, KSUs are appointed by merit not by seniority. Thus, a third-ranking officer can be promoted to the no 1 post as KSU if he is assessed to be a smarter and better leader than his seniors. A KSU is given a two-year term initially with a very high salary. If at the end of two years, he fails to perform, he will be demoted to his former position with a lower salary.
LKY said the Singapore civil service must recruit the cream of the graduates. I was told only top graduates from top universities are accepted into the service. They are very well paid.
I knew about this when I was KSP and visited my counterpart in Spore to learn how their ministry of finance manages their national wealth fund (Spore Govt Investment Corporation ) and its GLC’s . At that time, we in the Treasury were in the process of establishing our own national wealth fund — Khazanah Nasional Berhad , based on the Norwegian and Spore models. As a national wealth fund, Khazanah’s role is to manage its assets with the highest standards of corporate professionalism so as to create new wealth for future generations. To achieve this objective, there must be no political interference on Khazanah’s management functions. As Khazanah controls the biggest listed companies on the KLSE, and its Group is the largest issuer of corporate bonds in the country, any political meddling will have negative implications throughout the whole country. Foreign investors will think twice about investing in our stock and bond markets. Inevitably, the implications will lead to higher costs of borrowing for the federal Treasury. Although most of Treasury borrowing is domestic, the negative sentiments will also affect local interest rates.
I hope PN and UMNO politicians especially will take notice of my advice not to play politics with our GLICs, especially Khazanah. Let me be very clear. Khazanah is not a Bumi institution. It is a national wealth fund – it belongs to all Malaysians.
Dr Mahathir: Khazanah should re-focus on helping Bumiputera own stakes in companies
PUTRAJAYA (July 4): Khazanah Nasional Bhd should go back to its “original focus” of helping the Bumiputera grow their ownership in companies, said Prime Minister Tun Dr Mahathir Mohamad today. Speaking at a press conference here, Dr Mahathir said that Khazanah has strayed away from its purpose of holding shares allocated to the Bumiputera public until they are able to acquire the shares for themselves.
Instead, he claimed that the sovereign wealth fund is now hoarding shares in the local stock market — even those that are open to non-Bumiputera.
“Khazanah was initially formed to buy up the shares allocated to the Bumiputera, because when [the Bumiputera] buys shares, they immediately sell them to others [as some do not have the monetary capacity to hold them for long-term].
“So to stop them from doing that, we created Khazanah. But now Khazanah seems to be taking up all [sorts of] shares all on their own, whether they are meant for the Bumiputera or not,” Dr Mahathir said.
“So maybe they should go back to their original focus,” he added.
Dr Mahathir also described Khazanah as currently doing “funny things such as buying houses and taking over companies”.
Khazanah Nasional Bhd, majority-owned by the Ministry of Finance (MoF), was incorporated during Dr Mahathir’s tenure as the fourth Prime Minister in 1993 with an initial endowment of RM7 billion.
According to its website, Khazanah is “entrusted to hold and manage the commercial assets of the government, and to undertake strategic investments on behalf of the nation”, which explains its stakes in government-linked companies (GLC) like Sime Darby Bhd and Tenaga Nasional Bhd.
A local news portal reported that Dr Mahathir is relooking into Khazanah’s role because it is “no longer helping to increase Bumiputera equity in the stock market”.
In its early days, assets under Khazanah’s management which have been divested included shares in EON Bhd and Hicom Holdings Bhd.
In 2004, Khazanah was also given the mandate to help nurture government-linked companies under a 10-year GLC Transformation Programme through “a more active investment approach”.
Khazanah is now listed on the Sovereign Wealth Fund Institute as among the top 15 largest sovereign wealth funds in the world which deals with non-commodity investments, with an unaudited net worth of RM115.6 billion as at Dec 31, 2017. END
Soon after the PH govt came into power following their GE14 victory, the management and staff of Khazanah were shocked when Tun M suddenly made the statement to the media that K has forgotten its original objective to help Bumis own more shares in the corporate sector.
The MD of Khazanah immediately contacted me (I was the founding MD/CEO of K after retiring as KSP in Aug 1994) asking me to give my frank comment whether Tun M was correct in his criticism. I told the MD (he succeeded me after I retired from Khazah in Aug 2003) that Tun M was wrong. With that confirmation from me that Khazanah was set up as a national wealth fund, not as a bumi institution, he met Tun M to explain the original objective of setting up K. Tun M accepted the MD’s explanation, as I later heard.
Khazanah officers were relieved that the political threat died down.
Tan Sri Dato’ Mohd Sheriff Bin Mohd Kassim served as the Secretary-General of Treasury, Ministry of Finance for 3 years from 1991 to 1994 and as Managing Director of Khazanah Nasional Berhad for 9 years from 1994 to 200. Tan Sri is a founding member of the civil society organisation, G25.