The Government should state what action it will take to ensure consistent returns after disposing some of its national strategic assets, says Datuk Seri Dr Wee Ka Siong (BN-Ayer Hitam).
The MCA president added that at the moment, the Government had yet to disclose concrete plans to replace the disposed assets.
“For instance, (Khazanah Nasional Bhd’s stake in) IHH Healthcare Bhd – which brought many benefits – was sold to Japan’s Mitsui & Co Ltd without any open tender for about RM8.2bil.
“Now, we will no longer get any returns. What are the concrete steps taken by the Government after selling it?
“How are they going to invest strategically to get consistent returns in the future?” he said in his supplementary question to Deputy Economic Affairs Minister Mohd Radzi Md Jidin during Question Time.
In response, Mohd Radzi said that the sale of equities or disposal of assets in full or half by any government-linked investment companies (GLIC) like Khazanah was nothing new.
“As an investment fund, Khazanah will carry out sales of equities each year no matter whether it was done during the previous or new administration.
“The sale of equities is considered done once the investment has achieved its financial or strategic targets,” he said, adding that this was Khazanah’s business model.
“Without disposing (the assets), Khazanah would be too dependent on dividends and their portfolios would remain stagnant,” he added.
Mohd Radzi also revealed that Khazanah had divested 84 times with proceeds worth RM46.16bil between April 2018 and this year.
“From May 2018 until June 2019, it had divested a total of 22 times with proceeds of RM18.76bil obtained,” he said.
He explained that the proceeds of sales of equities by selected companies under Khazanah or investment companies between May last year until 2019 would be used by the GLICs to make new investments or service its debts.
“As a separate entity, the proceeds from the sales made by the GLICs would not go directly to the Government’s coffers but would be paid in other methods such as dividends or taxes,” he said.
Citing another example, Mohd Radzi said the decision to sell Khazanah’s stake to a Singaporean developer M+S Pte Ltd involving a five-star hotel in the island republic was Khazanah’s own commercial decision.
“The decision to sell assets to M+S was made during under the previous administration.
“When the new Government takes over, we proceed with the disposal as it is part of Khazanah’s commercial decision,” he told Hassan Abdul Karim (PH-Pasir Gudang).