KUALA LUMPUR – Khazanah Nasional Bhd will refer to its directors before making any major business decisions.
In its report, the Public Accounts Committee (PAC) said the sovereign fund’s board of directors needs to approve any major investments or divestments worth RM750 million and above.
“Every proposal for investment or divestment will be presented to the investment committee and the executive committee (exco).
Every transaction working paper must include the investment or divestment proposal, and detailed due diligence, all of which must be discussed before approval is given.
“Proposals with an investment or divestment value of more than RM750 million for strategic and commercial funds worth RM1.5 billion must be presented for approval of Khazanah’s board of directors.
“This process will ensure that any decision on investments and divestments is done with integrity in a professional and transparent manner,” read the PAC report.
The PAC had originally summoned the GLC last year due to its poor financial performance in 2018, when it recorded a loss of RM6.27 billion compared RM2.9 billion in profits in 2017.
The PAC began its enquiry into the losses on April 1, last year, and presented its findings to the Dewan Rakyat in October that same year, making three recommendations.
The first recommendation was that Khazanah continue its new strategy for risk management.
The second was that Khazanah conduct strategic investments without political interference, and the third was that Khazanah must present a feedback report on the PAC recommendations.
Despite its losses in 2018, the government-linked company recorded an impressive profit of RM7.36 billion a year later on the back of divestment gains and lower impairments, coupled with robust portfolio returns.
Meanwhile, Bernama reported that the follow-up action taken by the Finance Ministry and Khazanah on the recommendations made by the PAC proved that the suggestions and findings were given due attention and taken seriously.
“I would like to thank the ministry and Khazanah for successfully complying with the three-month period given to respond to the recommendations contained in the PAC report,” said chairman Wong Kah Woh.– The Vibes, December 1, 2020
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