SHAH ALAM, Aug 18 — Selangor Mentri Besar Azmin Ali today explained that he is forming a new investment arm to protect the state from business risks and to get away from Mentri Besar Incorporated (MBI) that he claimed was “tainted”.

In a press conference where he explained the Darul Ehsan Investment Group (DEIG) today, Azmin also said it was MBI’s mandate to only focus on welfare and community development programmes, as engaging in business dealings could jeopardise the state’s resources.

“You must understand that MBI is directly under the state and it is not the business of the state to do business, because once you enter into contracts and businesses, certainly you are exposed to certain levels of risk so it is about the issue of risk management here,” Azmin said.

Azmin told reporters here in the State Secretariat that MBI would continue operating, but focusing on Corporate Social Responsibility (CSR) matters for residents.

DEIG, in turn, would fund itself using the revenue it makes from its investments, while also preventing the state from being liable for its decisions.

The firm will also be established under the Companies Act 1965 and not an enactment like MBI.

“So that’s why we developed a new and clean entity that has no tainted legacy from the past, so that this new entity known as DEIG will focus purely on the investment of the assets owned by the state,” he said.

The Bukit Antarabangsa assemblyman said that his move is also not unique, as similar initiatives were carried out by the federal government as well as Singapore, citing entities such as Khazanah Nasional and Temasek Holdings.

Earlier, state lawmakers questioned the rationale behind DEIG, saying that Selangor’s assets could have been consolidated by merely restructuring MBI and that the new firms would not come under the state assembly’s scrutiny.

A heated argument also broke out between Azmin and his predecessor, Tan Sri Abdul Khalid Ibrahim, after the former claimed that DEIG was necessitated by the latter’s alleged mismanagement that included a RM2.6 million payoff for ex-employees prior to his resignation.

In December last year, MBI’s audit report revealed that Abdul Khalid acted unilaterally without the consent of MBI’s board of directors when he paid approximately RM2.6 million to his former staff.

Selangor is currently suing for the return of the sum.