Published July 1, 2009

Malaysian GLCs must sell non-core assets: Najib

The companies will now compete on a 'level playing field' with private businesses, he says

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(KUALA LUMPUR) Malaysia's government-linked companies (GLCs) will be required to sell their stakes in non-core businesses and should only remain in industries where they can be competitive, Prime Minister Najib Razak said.

Mr Najib: 'There will be no issue of government providing assistance to government- linked companies by virtue of its shareholding to the detriment of private sector competition.'

Government-linked investment companies should also divest their holdings in businesses that are operating in industries that are 'best taken by entrepreneurs', Mr Najib said in a speech yesterday. The companies will now compete on a 'level playing field' with private businesses, he said.

Mr Najib, who took office in April, has unveiled a RM67 billion (S$27 billion) spending plan, raised foreign ownership caps at banks and let in more overseas lenders for the first time in more than a decade as he seeks to revive an economy that may shrink as much as 5 per cent in 2009.

The premier yesterday announced the easing of investment rules governing takeovers, initial public offerings and property purchases. 'There will be no issue of government providing assistance to government-linked companies by virtue of its shareholding to the detriment of private sector competition,' Mr Najib said.

Petroliam Nasional Bhd, Malaysia's state oil company; shipping group MISC Bhd; Sime Darby Bhd, Malaysia's biggest palm oil producer and national carrier Malaysian Airline System Bhd are examples of government-linked companies that should strive to be 'future regional, if not global, champions', Mr Najib said.

He also mentioned Axiata Group Bhd, South-east Asia's second-largest mobile-phone provider; Malayan Banking Bhd and CIMB Bank Bhd, the nation's biggest banks.

'These companies must continue to pursue an increasingly international outlook in terms of market penetration and international competitiveness,' he said. -- Bloomberg