The Reducing Government’s Role in Business (GRiB) Strategic Reform Initiative (SRI) aims to rationalise the Government’s role in business to achieve three main goals:
A three-pronged approach will be taken to attain these goals:
- Avoid crowding out the private sector;
- Increase the liquidity of the capital markets; and
- Improve the Government's fiscal position.
- Clearly establish the Government's role in business;
- Develop a clear divestment plan for Government-linked investment companies (GLICs); and
- Establish clear governance guidelines for Government/Ministry and State-owned companies.
The Government’s GLIC divestment plan commenced in 2011 by identifying 33
GLICs as ready for divestment – five were identified for stake pare-downs,
seven for public-listing and 21 for outright sale. 24 of these companies were identified
for divestment in 2011-2012.
Through this SRI, the Government will also gradually evolve its role in business
from investor to facilitator, using these guidelines for Government participation
in the private sector:
- Co-investing with the private sector in projects that will boost GNI, such as in
the Regional Economic Corridors.
- Being involved only in businesses directly related to issues of national security,
such as defence and food security.
- Limiting investments to businesses that involve large capital investments, require
long gestation periods, such as nano-technology, and which are deemed strategic
businesses or of national interests.
- Participating in national infrastructure projects such as renewable energy and public
- During the year, four of the 24 GLICs identified for divestment for 2011-2012 were
disposed of, following 11 divestments in 2011. The divestments in 2012 comprised:
- The Employees Provident Fund (EPF)’s reduction of its 45% stake in RHB Capital
Bhd to 40.7%
- Felda Global Ventures Bhd’s listing on Bursa Malaysia
- The Armed Forces Fund (Lembaga Tabung Angkatan Tentera or LTAT)’s sale of
its 97% stake in Johan Ceramics Bhd
- Government private equity firm Ekuiti Nasional Bhd’s divestment of its 24%
interest in Tanjung Offshore Bhd
- Under a separate plan, sovereign fund Khazanah Nasional Bhd conducted or commenced
five divestment exercises. These comprised the listing of Integrated Healthcare
Holdings Bhd, the sale of its entire 42.7% stake in Proton Holdings Bhd and a reduction
of its stake in Tenaga Nasional Bhd to 34% from 35.2%. It has also invited tenders
for its divestment of STLR Sdn Bhd and Time Engineering Bhd.
- State investment fund Permodalan Nasional Bhd invited interested parties to tender
for its companies FEC Cables, U-Travelwide, U-Insurance and Inobel.
- Established in 2012, the Ministry-Level Divestment Plan identified nine companies under four Ministries that are ready for divestment from 2012-2016.
- In August, the Ministry of Finance (MoF) sold its 40% owned Kedah Aquaculture Sdn
Bhd to SKS Realty Sdn Bhd for RM45 million.
- The Ministry of Education and Higher Learning will amend guidelines to allow the rationalisation of public universities’ involvement in business.
- Johor was identified as a pilot state for the State Government Divestment Plan,
with Johor Corporation Bhd (JCorp) and PEMANDU having commenced preliminary talks
on streamlining JCorp’s core businesses to focus on palm oil plantations,
healthcare, property and the food industry. To-date, JCorp has completed corporate
- Its privatisation of KFC Holdings (M) Bhd and QSR Brands Bhd.
- Kulim (M) Bhd’s exit of its retail food business. Kulim is now considering
disposing some of its hotel assets and reinvesting the funds into its hospitality