KUALA LUMPUR • The resignation of the entire board of Malaysia's sovereign wealth fund Khazanah Nasional is a "wise decision", says Finance Minister Lim Guan Eng.
Mr Lim yesterday told reporters in the Parliament lobby: "I believe that is their decision and it is to give Prime Minister (Mahathir Mohamad) the opportunity to decide on the direction of the board - whether to maintain the old board appointed by the previous government or to appoint a new one.
"I think that is a wise decision, to leave it to the Prime Minister."
The RM157.2 billion (S$53 billion) fund's managing director and its entire board offered to resign on Tuesday in the biggest management shake-up at state-linked firms since the new Malaysian government took charge.
The decision was taken due to pressure from the government, especially after Prime Minister Mahathir's public comments calling for a change in Khazanah's leadership and business direction, sources told Reuters.
"There's a realisation that things could not continue as they were," said one source familiar with the matter who did not want to be identified.
Since his dramatic win in the May 9 polls, Tun Dr Mahathir has booted out top executives at state-linked firms and agencies, and instructed his government to revamp companies it controls.
He replaced the central bank governor and the chief of Malaysia's largest fund management firm in the last few weeks, both appointed by the scandal-hit former premier, Najib Razak.
Khazanah said in a statement yesterday that the government would make a final decision on the fund's leadership "in order to facilitate a smooth and orderly transition under the new government".
The sovereign wealth fund's portfolio of more than 100 companies includes core holdings such as Malaysia's second-biggest bank, CIMB Group Holdings, utility group Tenaga Nasional Bhd and regional telecoms firm Axiata.
Proceeds from deals with Khazanah were used by the Najib government to meet some liabilities of the debt-laden state fund 1Malaysia Development Berhad, although the fund has said it had no control over the utilisation of those funds.
THE STAR/ASIA NEWS NETWORK, REUTERS