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Malaysia to review political representation in govt-linked funds

Funds with political representation on their boards will be reviewed and changed

Former finance minister Daim Zainuddin heads a team to advise the government on economic and financial matters.

Kuala Lumpur

MALAYSIAN Prime Minister Mahathir Mohamad's new government will review political representation in the country's largest government-linked investment firms, including the main sovereign and state pension funds, the funds have said.

A joint statement from six funds said that Dr Mahathir's government, which took power after last week's general election, emphasised the importance of "separation between professional management of the institutions and any undue interference from political or any other external parties".

Malaysia's biggest funds are headed by executives mostly appointed during the nearly decade-long tenure of former prime minister Najib Razak. It was not immediately clear if any of them would be affected by the review.

The funds include sovereign fund Khazanah, pension fund Employees Provident Fund, investment fund Permodalan Nasional Berhad, retirement fund Kumpulan Wang Persaraan, military retirement fund Lembaga Tabung Angkatan Tentera, and Lembaga Tabung Haji, a fund for the pilgrimage to Mecca.

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These funds control billions of dollars in assets, including significant shareholdings in some of the country's biggest publicly traded companies, including banks.

Last Saturday, Dr Mahathir appointed a special team - a Council of Eminent Persons - to advise the government on economic and financial matters for the next 100 days.

Former central bank governor Zeti Akhthar Aziz, billionaire tycoon Robert Kuok, among others, were named to the team that is headed by former finance minister Daim Zainuddin.

"For funds that had political representation on their respective board of directors, Mr Daim reaffirmed that this will be reviewed and changed, as required," the funds said in a joint statement, after meeting Mr Daim on Sunday.

Mr Daim also sought feedback from the funds on the outlook for the economy, the market and the ringgit currency.

"Collectively, we agreed that while the market may see some short-term volatility as it factors in changes, the outlook beyond that is positive. We highlighted the emerging consensus of independent commentators that sees this as a historic opportunity to reset the nation's economy," the statement said.

Mr Daim also said that the council will use the government-linked funds and companies to review projects and contract and other issues such as toll roads.

Separately, the Finance Ministry said that the new government has not yet set a date for the abolishment of the Goods and Services Tax (GST). Dr Mahathir had promised to abolish the deeply unpopular tax within the first 100 days of assuming office.

In a statement, the ministry said that rumours on social media that the GST would be abolished effective June 1, with no new tax to be imposed for first two years of the new administration, were untrue.

"As such, all businesses must follow current law and continue imposing GST as required," the ministry said.

Dr Mahathir had said on Sunday that the country had sufficient revenue to remove GST, according to a report by state news agency Bernama. REUTERS

READ MORE: Malaysian markets claw back early losses from election shock

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