Board quits at Malaysia’s Khazanah

All members of the board of directors of Malaysia’s $39bn sovereign wealth fund have resigned.

Nine members of Khazanah Nasional, Malaysia’s $39 billion state investment arm, have resigned.

Khazanah confirmed the resignations in a statement on Thursday, saying that the move was made “in order to facilitate a smooth and orderly transition under the new government”.

The nine directors who resigned are Khazanah managing director Tan Sri Azman Mokhtar, executive committee board chairperson Nor Md Yusof, Nazir Razak, Nirmala Menon, Mohamed Azman Yahya, Mohammed Azlan Hashim, Yeo Kar Peng, Andrew Sheng Len Tao and Raja Arshad Raja Uda.

The sovereign wealth fund said it will issue another statement once it has further details.

Local media indicate resignation is a response to Malaysian prime minister Mahathir Mohamad’s criticism that government-linked companies are overpaying their top executives regardless of the companies’ performance. In a July interview with South-East Asian business website Investvine, Mahathir said: “The GLCs inevitably lose money, but the salaries of these people are very high and they enjoy all this without bothering whether the company makes profits or not.”

The active sovereign wealth fund has a 6.4 percent allocation to alternatives. It has backed funds by Ancora Capital Management, Walden International and MSC Venture Corporation, according to PEI data.

It is unclear how much of its portfolio is in private equity.

Technology is one of Khazanah’s key investment areas and makes up about 5 percent of its portfolio. It opened a San Francisco office in 2013 to focus on tech-related investments. The sovereign wealth fund invested about $400 million in Chinese tech giant Alibaba in 2012 and 2013, ahead of the Chinese company’s initial public offering in 2014.

Ahmad Zulqarnain Onn, deputy managing director of Khazanah, said at a conference in Hong Kong in March that technology and its impact on productivity is one of the key investment areas for Khazanah.

“Technology is so cheap today and all chief executives and management teams need to look at how to increase productivity of the businesses and how to utilise technology to make the businesses much more efficient,” he said.