PETALING JAYA: State-owned investment arm Khazanah Nasional Bhd could see some foreign appointments to its board of directors as part of its strategy to tap on diverse expertise.
Sources say one of these appointments could be that of a Chinese national who is the founder of one of China’s largest artificial intelligence firms which also happens to have the backing of e-commerce giant, Alibaba.
It it materialises, the appointment would also largely be in line with Khazanah’s emphasis on Chinese investments, one source points out.
According to a May report by Khazanah, one of its first forays overseas was into China where in 2005, it bought close to a 10% stake in the-then biggest retailer in China, Parkson.
“The initial investment was just one of a string of subsequent investments that Khazanah has made in multiple sectors in China, including in the education, renewable energy, finance, retail, innovation and technology and healthcare sectors,” the report noted.
The investment arm also has an office in Beijing, one of the six overseas offices that it has established since its formation in 1994.
The other new board appointments could likely be corporates from the US and Japan , the source adds.
These new directors will be in addition to the directors who came into Khazanah in July following the mass resignations of the entire board.
The old board, which comprised nine members, had resigned after reportedly reaching a unanimous decision that Prime Minister Tun Dr Mahathir Mohamad’s administration should be the one to determine the sovereign wealth fund’s new leadership structure following the fall of the old government.
Among the old board members were Khazanah ex-managing director Tan Sri Azman Mokhtar, Datuk Seri Nazir Razak, Tan Sri Mohamad Azman Yahya, Datuk Mohammed Azlan Hashim, Tan Sri Raja Arshad Raja Uda and Tan Sri Andrew Sheng Len Tao.
They have so far been replaced by Dr Mahathir himself who is chairman, and board members, Economic Affairs Minister Datuk Seri Mohamed Azmin Ali, former Petroliam Nasional Bhd president and chief executive Tan Sri Hassan Marican, former Bank Negara deputy governor Sukhdave Singh and former Securities Commission executive director Goh Ching Yin.
Datuk Shahril Ridza Ridzuan, ex- EPF CEO has replaced Azman as managing director.
As a fund, Khazanah has made gains and also experienced losses over the years.
In the last decade, it has achieved gains of about RM100bil, with losses amounting to about 20% of that amount, leaving net gains totalling some RM80bil.
Meanwhile, foreign appointments to the board of sovereign wealth funds are nothing really new in the region.
In 2013, neighbouring Singapore’s Temasek Holdings made a relatively high-profile appointment when it appointed former World Bank President Robert Zoellick to its board of directors as it planned to start an office in the US.
Currently, there are at least three foreigners on its board which has more than 10 directors.
Ho Ching, who is also the wife of Singapore’s Prime Minister Lee Hsien Loong is Temasek’s executive director and CEO.