Government-linked companies (GLCs) are companies that have a primary commercial objective and in which the Malaysian Government has a direct controlling stake. Some of these GLCs include:
- Malaysia Airline Berhad (MAB)
A GLC wholly-owned by Khazanah Nasional, which is owned by the Ministry of Finance Incorporated (MOF Inc.). Up till 2014, the airline was known as Malaysia Airlines (MAS) before a restructuring exercise that changed the name to MAB.
- PLUS Malaysia Berhad
A GLC co-owned by Khazanah (51%) and EPF (49%). PLUS was founded as a private company in 1986. The government then took over after the Asian Financial Crisis. Early this year, a proposal to privatise PLUS was rejected. Thus, PLUS remains government-owned. Earlier this year, IDEAS released a press statement endorsing the government’s decision not to sell PLUS.
- Axiata Group Berhad
Incorporated as an operations arm of Telekom Malaysia before becoming a company of its own in 2018. We define Axiata as a GLC too because GLICs (KWSP, Khazanah and PNB) own almost 80% of the company! How is Celcom related to Axiata? Celcom is a subsidiary of Axiata which controlled 20% market share of mobile cellular subscriptions in 2018. But more interestingly, the GLICs also own substantial shares in competitor firms. Eg: Maxis (23.5%) and DiGi (26.3%). Last year, the proposed merger between Axiata and Telenor (owner of DiGi) was called off. The reason was not made known officially, but optimization of human resource could be a potential explanation.
- Tenaga Nasional Berhad (TNB)
You can see from the timeline how TNB transformed from a state owned enterprise, to a private company wholly-owned by the govt to what it is now, a public listed company on Bursa Malaysia. The govt is a majority shareholder via different GLICs. TNB is very important in Malaysia’s developing economy as it is the sole electricity utility company in Peninsular Malaysia. It is also the only provider of electricity in Sabah as Sabah Electricity is owned by TNB. Recently Datuk Seri Mohamad Hasan, UMNO Deputy President was touted to be appointed as TNB chairman, although he rejected the appointment.
- Telekom Malaysia Berhad (TM)
Did you know that TM was the first Malaysian state-owned enterprise to be privatised? In 1987, the privatisation of Jabatan Telekom Malaysia (JTM) means that it is transferred from public to private ownership and control. In 1990, 25% of the company was placed on the Kuala Lumpur Stock Exchange. Despite being privatised, TM is a GLC as the government owns more than 68% shares via various GLICs. Recently, TM launched its “Digital Economy Special Programme” in support of the government’s PRIHATIN stimulus package to drive digitalization, with extra focus on the rural economy. Without TM, private actors might underinvest in rural areas. This is an example of how GLCs can address market failure. But must the government hold a golden share in order for GLCs to serve the nation effectively?