Case Study Glic of Kumpulan Wang Amanah Pencen (Kwap)

INTRODUCTION

Government-Linked Companies or GLCs can be defined as companies where the government owns at least 20% of the issued and paid-up capital or companies with a primary commercial objective and in which the Malaysian Government has a direct controlling stake. Controlling stake refers to the Government’s ability to appoint Board of Directors members, senior management, to make decision such as contract awards, strategies, restructuring and financing, acquisitions and divestments for GLCs or through GLICs. The Establishment of GLCs was carried out progressively through the process of privatization and corporatization. Before the establishment of GLCs was carried out, many government departments were first privatized and transformed into separate wholly-owned government companies. There are two major objectives in the privatization policy. Firstly, the policy would speedily achieve the goal of National Economic Policy (NEP) of providing more avenues for businessman specifically to bumiputra to participate in economic activities. Secondly, through privatization, it would reduce government’s burden in providing essential services to the public. In example, road construction, health services, energy and power. Thus, these services were privatized to bumiputra private companies where they had the right expertise and also resources. By this efforts, government have more time and funds to focus efforts on others important tasks.

Under the government’s patronage, these privatized companies seem to be thrived and became very successful. On the other hand, many of these privatized companies were corporatized though the issuing of a portion of their shares in Bursa Malaysia and at the same time, these corporatized entities have come to be known as Government-linked Companies as the government maintained substantial ownership in these companies.

According to the Putrajaya Committee on GLC (PCG), top 17 government-linked companies (GLCs) recorded an all times...