KUALA LUMPUR, March 6 — Poor decisions and a huge investment in Malaysia Airlines Bhd (MAB) is the reason why Khazanah Nasional Bhd is left saddling a RM6 billion debt, Datuk Seri Azmin Ali said.
The economic affairs minister was responding to Barisan Nasional’s (BN) attacks following the sovereign fund’s announcement of impairment costs from 2018.
He said poor decisions and a huge investment in Malaysia Airlines forced Khazanah to bear the brunt of the losses at a time when the government is looking to raise money for government coffers, depleted by a fiscal deficit and a massive debt from a multi-billion-ringgit scandal at state investment fund 1Malaysia Development Berhad (1MDB).
“Khazanah reported RM6 billion loss was caused by impairments that increased to more than RM7b as a result of a review of the assets and investments made before the new govt took over,” Azmin said in a series of tweets.
Khazanah P&L: Trouble these days is some politicos, often failed Ministers, babble first and check later. End up meludah ke langit, terkena muka sendiri. Here's why.— Mohamed Azmin Ali (@AzminAli) March 5, 2019
“The largest single loss is RM3 billion plus on MAS as the strategies implemented has not turned around the company.
“Investments made over the last few years into the airline before Pakatan Harapan took over have to be impaired. Tell me about impaired reasoning!” he asked.
Azmin is referring to Malaysia Airlines by its previous acronym, MAS.
Yesterday Khazanah managing director Shahril Ridza Ridzuan, who took charge of the fund in August, said the government have asked them to start anew with fresh mandates.
This includes restructuring with new investment strategies that classifies its portfolio into a commercial and a strategic fund.
“Forget the blame game. Every cloud has a silver lining,” Azmin continued in his tweets.
“Look at 2018 as a clean-up of the problem assets left behind in the portfolio. Having taken these measures, I dare say that Khazanah will return to profitability in 2019.”
Khazanah’s portfolio value as measured by its net worth adjusted (NWA) declined to RM91 billion as at Dec 31, 2018, a 21.6 per cent drop from RM116 billion year-on-year.
In 2018, the sovereign wealth fund had declared a dividend of RM1.5 billion.
Realisable asset value fell to RM136 billion from RM157 billion during the same period.
The long-term portfolio performance remained on an upward trajectory, with NWA achieving an 11 per cent return per annum over the last 10 years.
* A previous version of this story contained an error which has since been corrected.