KUALA LUMPUR - One of Malaysia's biggest companies, Telekom Malaysia, has been without a permanent chief executive since last year's general election, raising concerns in the past week over political interference from the Prime Minister's Office in the running of the firm.
The national telecommunications provider has had two acting CEOs in the last 12 months, and the current chairman Rosli Man insists the government has yet to finalise its pick.
The Finance Ministry (MOF) holds a golden share in the state firm which controls the phone and internet infrastructure nationwide, giving it the final say on key decisions such as on top office bearers.
The Telekom board of directors has said its nominee for the CEO position, current chief operating officer Imri Mokhtar, was accepted by the MOF in February.
But Mr Rosli shocked corporate and political watchers last week (May 29) when he told the company's annual general meeting (AGM) that he had been instructed by the Prime Minister's Office (PMO) to hold back the appointment.
It was only yesterday (Wed) that Tun Mahathir Mohamad finally stepped in to say that Mr Imri would not be elevated despite Finance Minister Lim Guan Eng revealing as recently as Saturday that he had not been informed of any change by the premier.
"What I received was from the Prime Minister himself. I have to stress this, it must come from the PM," Mr Lim had said.
This has raised the ire of shareholders and surprised financial market watchers, who have remained cautious towards Malaysia due to a lack of policy clarity amid frequent interventions in government-linked companies (GLC) by the Mahathir administration since he returned to power last year.
"Such concerns will be exacerbated when huge state enterprises like Telekom are operating without a CEO for 12 months and the blame game over the delay is played out in the open among key stakeholders," political risk consultancy KRA's strategy director Amir Fareed Rahim told The Straits Times.
The issue is closely watched as Telekom is one of the largest GLC, and the Pakatan Harapan (PH) administration had promised that it would place professionals, and not political appointees, to lead these state enterprises. This would have been a departure from the norm under the ousted Barisan Nasional government. The Telekom CEO vacancy arose in June 2018 when former premier Najib Razak's media advisor Shazalli Ramly stepped down.
But populist policies adopted by the new administration and the imposition of stricter regulations have hit a number of GLCs including Telekom, which lost more than half its market value in the first six months of PH's leadership.
In trying to bring down living costs for voters, the government curtailed wholesale prices of internet bandwidth provided by Telekom, shrinking its market value as worried investors shied away.
According to Institutional Investors Council of Malaysia adviser Lya Rahman, who attended the AGM, Mr Rosli first told shareholders that the MOF had not responded to its recommendation for Mr Imri to become CEO. But he then recanted, saying the ministry had in fact given the thumbs up in February, but the PMO then stepped in to block the appointment.
"Either he (Rosli) was trying to cover up something or having caught in a quandary, he slipped his tongue by saying something which he shouldn't. From a corporate governance standpoint, the different accounts are troublesome," she said.
She then asked "why is the PMO interfering with the decision made by the special shareholder... are there people in PMO who are more powerful than the PM and the Minister of Finance?"
Official sources and executives in Telekom told The Straits Times that Mr Rosli strictly referred to the PMO and not the premier himself. This was because Tun Mahathir had been consulted and did not object to Mr Imri's appointment, as other stakeholders had greenlighted the choice.
"Khazanah and KKMM were both agreeable," a top government official told The Straits Times, referring to the sovereign wealth fund Khazanah that owns 26 per cent of Telekom Malaysia, and the Communications and Multimedia Ministry (KKMM) that regulates the industry.
Mr Imri was made acting CEO in November and the board then recommended to MOF that he take the position permanently. Mr Rosli stepped up as chairman on Dec 3.
Mr Imri has guided the company to nearly double its profit to RM308 million in the first quarter of 2019, a swift turnaround from last year when its earnings dropped by 84 per cent largely due to the writing down of the value of its assets following the government-mandated internet discount.