Welcome to The Malaysianist, an adversarial newsletter investigating money and power. This is a space free from the gatekeepers and institutional pressures but rooted in community.
Today’s post is open to all, but future issues may not be. Subscribe to get full access and more.
This morning’s post is dedicated to a single subject: Tenaga Nasional Bhd.
The national utility giant is experiencing a leadership tussle that may end with the ouster of chief executive Amir Hamzah Azizan, according to insiders, who are calling the latest development a blow to corporate governance.
Pushing for Amir Hamzah’s resignation is the group’s executive union, TNB Executives’ Association (PETNB), citing the hiring of 20 external staff, which one source said didn’t make sense as that cohort is less than 0.1% of the group’s 27,000-strong workforce, excluding subsidiaries.
The concern is that the union may have the backing of TNB chairman Mahdzir Khalid, an Umno warlord. The Padang Terap MP was appointed to the job as part of Prime Minister Muhyiddin Yassin’s policy to placate loyalists with plum posts on government-linked companies (GLCs).
TNB chief retail officer Megat Jalaluddin Hassan has been earmarked as Amir Hamzah’s successor, but no official announcement has been made yet as talks are still in progress.
“If Amir (Hamzah) really needs to go, then it should be based on merit,” the source said. “Such a move has to come from the board. Not externally. It just goes against corporate governance best practices. And, so, we are asking, ‘Why does he need to go?’” the source said.
TNB’s largest shareholders — sovereign wealth fund Khazanah Nasional Bhd (33.9%), pensions fund Employees Provident Fund (23%) and asset manager Permodalan Nasional Bhd (22.1%) — have so far remained silent over this development. They are expected to be acquiescent as each of them is ultimately answerable to either the prime minister or finance minister.
The board is also heavily politicised. Aside from Mahdzir, two Barisan Nasional (BN) men have been appointed to the TNB board — Umno’s Nawawi Ahmad and MIC’s Rawisandran Narayanan — as independent non-executive directors in October.
Nawawi is Langkawi Umno chief while Rawisandran was Selangor MIC secretary from 2016 to 2018. Both are also said to be on good terms with Mahdzir, especially Nawawi, who served as a Kedah executive councillor when Mahdzir was menteri besar from 2005 to 2008.
While the loudest quit call is coming from PETNB, insiders said other non-executive unions are backing Amir Hamzah, but advocates have yet to step up for fear of repercussions.
Amir Hamzah was appointed under then Pakatan Harapan (PH) government and tasked to oversee a slew of reforms to make TNB more competitive and transparent, such as splitting the power generation and retail businesses, where both will have their own boards and balance sheets.
The separation of the two arms made up part of the recommendations under the Malaysian Electricity Supply Industry 2.0 (MESI 2.0) initiative launched in September 2018. The thrust of MESI 2.0 was to liberalise the domestic power industry but the plan is now subject to review after the change in government.
TNB also ventured further into renewables to meet PH’s aim for 20% of the country’s power generation capacity to come from renewable energy by 2025. The group aimed to have 1,700MW of generation under its renewable portfolio both internationally and domestically with acquisition plans to grow the business.
It is understood that Amir Hamzah’s intentions of pursuing these reforms may have annoyed Umno cronies eyeing lucrative contracts, including TNB’s Bumiputera vendor programme.
Deals under the vendor programme run into the hundreds of millions but do not need shareholders’ approval. Between 1995 and 2019, TNB spent RM16.9 billion for 822 companies, comprising 32 suppliers and 790 contractors.
Also, owing to its monopolistic advantage, TNB is flushed with cash. The group has RM5.22 billion in dry powder, according to its latest financials. For the third quarter ended September 30, the group posted a net profit of RM1 billion on the back of RM11.1 bil in revenue.
TNB’s strong cash position makes it particularly vulnerable to patronage as other GLCs, especially national oil company Petroliam Nasional Bhd (Petronas), have registered a massive earnings plunge, therefore leaving their social programmes, such as the Bumiputera vendor development scheme, hanging in the balance.
Meanwhile, Muhyiddin’s policy of awarding lawmakers with GLC posts has not only appeased some in Perikatan Nasional but, inescapably, ushered in the return of so-called corporates close to former prime minister Najib Razak, such as Wan Kamaruzaman Wan Ahmad and Mohammed Shazalli Ramly.
Wan Kamaruzaman has been appointed to the EPF investment panel effective November 1 as a “professional representative”. When he was Kumpulan Wang Amanah Diperbadankan (KWAP) chief from 2013 to 2018, Wan Kamaruzaman oversaw the fund’s purchase of a plot of land at the Tun Razak Exchange for 30 times the price of what 1Malaysia Development Bhd originally paid for.
Shazalli, on the other hand, is the new Boustead Holdings Bhd group managing director and chief executive. He double-hatted as Najib’s branding guru while being Telekom Malaysia Bhd chief, and was instrumental in putting together a video of GLC heads to perform the song Hebat Negaraku, the BN election slogan.