It’s been quite the roller-coaster for Khazanah Nasional, the other national sovereign wealth fund, over the last week.
First, their entire board of directors resigns en masse, in a bid to expedite “restructuring” that was to occur under Mahathir’s new government.
Then, news emerges that Prime Minister Mahathir decided to appoint none other than Prime Minister Mahathir (ie. himself) as head of the fund. He swiftly added Economic Affairs Minister Azmin Ali to the board of directors, along with allies including a member of his Council of Eminent Persons.
Today, Ali revealed just how bad things were being run at Khazanah after being taken to task over the shake-up by none other than former Prime Minister Najib Razak, who though out on bail and charged with money laundering, is still the representative for Pekan, in Pahang state.
The former PM wanted to know why the need for change, considering Khazanah had seen an asset increase from RM33 billion (US$8.1 billion) to RM 134.5 billion (US$33.1 billion), and taking that growth into account, what exactly did the new government mean when they said that the sovereign wealth fund needed to be put “back on track.”
Mahathir had previously criticized Khazanah from deviating from its original purpose, which was to help Bumiputeras (Malays and native people).
Great question. Mr Ali, do you want to take it?
The Economic Affairs Minister then divulged that a series of bad investments had been made by the fund, including a complete US$20 million (RM80 million) write-off for a failed online lingerie company. He added that this was one of their smaller failures when compared to others, which makes us wonder why even bother to mention it until we remembered the age-old ad-man adage: Sex sells.
Ali also threw in a RM3 billion (US$12 billion) mistake made by the old guard, after they sanctioned an investment that saw a private equity takeover of a bank.
Agreeing to “some” success under Najib, he said that the new administration will not compromise on investments that need to be corrected, saying they will get “special attention.”
Wondering what that means? So are we! What’s a bra got to do with it?
Alright, Khazanah 2.0 — show us what you got.
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