New law must bar politicians from key posts in GLCs, says lawyer

Any legislation aimed at strengthening governance in government-owned companies must include provisions explicitly barring politicians from appointment to key positions, says lawyer Salim Bashir.

The former Malaysian Bar president said the law should stipulate that candidates for key positions be identified through the ordinary recruitment process, with advertisements and interviews.

“Independent interview panels comprising qualified personalities could be headed by the chief secretary to the government.

“Upon selection, the candidates chosen should be referred to a parliamentary committee to conduct due diligence before formal appointment,” he told FMT.

When tabling the 2027 budget, Prime Minister Anwar Ibrahim announced that the government intends to draw up legislation to regulate entities entrusted with managing public funds and assets, to prevent a recurrence of scandals such as 1MDB and crises involving Tabung Haji (TH) and Felda.

The royal commission of inquiry’s report into TH, declassified in July, traced the fund’s financial issues to political interference in board appointments and recommended limits on political involvement in the fund.

It said several chairmen and board members appointed between 2014 and 2018 were active politicians, and that decisions on hibah rates, haj fees and financial aid during that period were influenced by political considerations.

Earlier in July, Anwar attributed Felda’s losses of nearly RM10 billion to mismanagement and excessive political interference.

While Salim supported the proposed bill, lawyer Shukor Ahmad was less enthused, arguing that existing laws and regulations—if strictly enforced—were more than adequate to address governance issues.

“The only problem besetting government-linked companies (GLCs) and statutory bodies is political interference and the placement of politicians, or politically linked individuals, onto directors’ boards or worse, helming these bodies.

“Unless the new law tackles this issue, the present laws are adequate but must be strictly enforced. The filters must be strict and admit no exception. There is enough talent out there who can drive organisations to achieve their objectives,” he said.

Shukor said the Companies Act 2016 and various other regulations already contain the “acid test for appointments”, prescribing the qualifications and duties of appointed directors.

He said political affiliation should not matter as long as appointees are sufficiently qualified to take on their posts.

In 2024, Anwar defended the unity government’s appointment of politicians to various positions in GLCs and government-linked investment companies (GLICs), saying they were all professionals.

He said all GLC and GLIC appointments undergo rigorous screening by several authorities, including the Inland Revenue Board, Bank Negara Malaysia, the Malaysian Anti-Corruption Commission and the police, to ensure candidates have clean records and that their appointments can be justified.

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