KUALA LUMPUR, Oct 13 — We write in regard to your article dated 9th October 2009 entitled “Whither Khazanah Nasional?” by an anonymous writer that made several serious allegations and cast negative aspersions on Khazanah Nasional Berhad (“Khazanah”).
The assertions made in the article implied that Khazanah has not performed, and that it is a “waste of time, talent and purpose” and at the same time, said, “turning it into a political tool for Barisan Nasional”. These are serious allegations that need to be addressed appropriately. Indeed, while we welcome your publication’s opinions and even some degree of artistic license on the subject, we need to highlight for the benefit of your readers to conclude for themselves, several relevant facts — all of which are already in the public domain — which were wittingly or otherwise left out in the article.
First, on the assertion that Khazanah has not created enough value as it has been merely, inter alia, “reshuffling paper assets” and “reduced to supervising flagging investments in Iskandar”, the best way to objectively answer this is to look at results.
As announced on 1st July 2009, Khazanah’s portfolio net asset value had risen by RM10.8 billion over the five preceding years, a value that has since continued to rise significantly to date. Further, the audited realised profits before tax over that period was a record RM5.7 billion, resulting in a tax and dividends payment of RM2.3 billion to the Government, an achievement over five years that is significantly higher than the previous nine years put together.
Moreover, while a significant part of these gains were generated from harvesting investments made during this period, we are pleased to highlight that these results were achieved based, most of all, on real fundamental gains made at our investments and investee companies. For example, the underlying earnings at our major companies (the ‘K9 companies’ as constituents of the 20 largest GLCs) doubled to RM10.8 billion from 2004 to 2007 and since the outset of the global crisis have remained relatively resilient since.
Second, on specific assertions of Khazanah’s investments. On Valuecap, your writer should have referred to Valuecap’s press statement issued on 30th June 2009 that highlighted its sterling performance of an increase in its portfolio value of RM3.7 billion since inception in 2003 and even more impressively, its outperformance of the broader market by 62.5 per cent during that period. Independent evaluations of such fund performance have placed Valuecap as among the best performing fund managers in the country.
Further, on “flagging investments in Iskandar”, again, publicly available information would have shown that Iskandar Malaysia in less than three years since its launch in November 2006, has already achieved its first five-year target investment commitments of RM47 billion. That this has been accomplished against a backdrop of the global economic crisis is a validation of Iskandar’s development plan, and importantly now, these investments are being implemented on the ground.
This underscores a third point on the rollout of Khazanah related projects under the two fiscal stimulus packages, which we report regularly to the Program Management Unit of the Ministry of Finance. This is progressing well in both the investments and capacity building aspects of the stimulus packages. Among the public announcements already made by companies controlled by Khazanah include Iskandar Investment Berhad’s award of a main infrastructure package, UEM Land Berhad’s implementation of various flagship developments in Nusajaya, and new investments in leisure and tourism, healthcare and telecommunications sectors.
There are other assertions in the article that are perhaps peripheral to the three above, but in the interest of clarity and simplicity, we will end here in the belief that anchoring this reply on publicly available facts is the best way to correct the misconceptions contained in your article.
We also wish to highlight that the article was written without your anonymous writer ever contacting us for a perspective and as such, we ask and thank you that you belatedly correct this by publishing this response.
Mohd Asuki Abas is Senior Vice President Communications & External Relations Unit Khazanah Nasional Berhad
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