Former Prime Minister Tun Dr Mahathir Mohamad today took to his popular blog to express his doubts over Khazanah Nasional Bhd’s (Khazanah) move to buy out the minority shareholders in ailing Malaysia Airlines (MAS) in order to take it private.
Mahathir’s main bone of contention was the question of MAS private status, post-Khazanah takeover. Seeing as how Khazanah is the Federal Government’s investment body, the former PM wonders if the move is not so much privatisation as it would be the re-nationalisation of the airline.
One of the main policy shifts Mahathir championed as Prime Minister in the early 1980s was the privatisation of state-owned businesses, particularly for the benefit of emerging Bumiputera entrepreneurs.
Mahathir also called into question the necessity for Khazanah to wholly own MAS, as the investment agency already held 70% of MAS shares before last week’s announcement.
He writes, “I believe prior to this privatisation, Khazanah owned 70% of MAS shares. Its control over MAS must be almost absolute. None of the minority shareholders can really say ‘No’ to MAS even if they all act together. So Khazanah has been in full control of MAS all this time. And all this time MAS has been bleeding profusely. In 10 years it has lost 10 billion Ringgit in terms of capital injection.”
Perhaps speaking from a position safely removed from elected office, Mahathir stressed that the nature of a government is to spend money, not save it. Therefore, Putrajaya having complete control of MAS might not translate into streamlining expenditure and restructuring management to make the national carrier more profitable (or at least lose less money), as “the way money is being spent nowadays doesn’t indicate the kind of careful financial management and scrutiny that MAS would require in order to turn around.”
He added, “Once when a new CEO was appointed MAS registered some profit. But that was through selling assets. How much more assets can MAS sell?”
Mahathir doesn’t seem to be confident that the Khazanah buyout will result in anything more than new people getting “huge salaries, allowances and bonuses” – and not much else. This is how he believes Khazanah operates.
Finally, Mahathir slipped in a snipe at current Prime Minister Datuk Seri Najib Tun Razak and others in the upper echelons of government by writing, “I shouldn’t say all these. I had such a bad record as Prime Minister. But I was ready to resign. And I did. I did because I failed. But no one wants to follow my example.”
MAS has been haemorrhaging money for the past three years, losing more than RM4.3 billion during that period, due to rising operating costs and what many analysts call gross mismanagement. This year alone, the airline has lost more than RM1 billion, a widening loss accelerated by the twin tragedies of the Flight MH370 disappearance in March and the more recent shooting down of Flight MH17 over eastern Ukraine.
See Also:
Khazanah to buy out MAS shares for RM1.4 billion, making it a private company
