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Back The Great and the Good The Ups and Downs of Azman Mokhtar

The Ups and Downs of Azman Mokhtar

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Azman-MokhtarFor Tan Sri Dato' Azman bin Hj. Mokhtar, the outlook has been very bright for a very long time.

A sharp student who graduated in Islamic Studies from the International Islamic University here in KL, he went on to be a Chevening Scholar at Darwin College, Cambridge.

Proudly returning to his country, his M.Phil in Development Studies in hand, he hoped to serve Malaysia and see the sort of profound growth taking place here that he had studied.

And working his way up the ranks he held senior positions at some very enviable Malaysia institutions. And he made a name in equity research and in the world of finance and markets. So there were perhaps not that many gasps of astonishment when he was appointed the Managing Director of Khazanah back in 2004.

And since he took over the reigns, the state run investment arm has, by and large, gone from strength to strength.

Last year Khazanah made a pre-tax profit of RM 5.3 billion – it was a record and one that was achieved despite three companies in the portfolio performing weaker than expected.

Khazanah has often appeared to have been proof that the Government is making the right moves to expand the country's wealth exponentially in the lead up to 2020.

So it is Khazanah's relative success that makes it more of a surprise when you consider just how much pressure Azman Mokhtar is under right now.

Though perhaps it's not such a shock when you study the unwinding of the share swap.

Rumours had swirled for months that the collaboration between Malaysia Airlines and AirAsia was about to enter a new phase. But just why did it come about so abruptly – and so messily?

At first the usual naysayers said that it was a fundamentally flawed deal. But in theory, and with the development of the Asean open-skies policy, the swap would have allowed both groups to compete in their respective corners of the market.

So where did it go 'wrong'?

A lot of it boiled down to obstinacy from the MAS unions. They were concerned that the tie-up would lead to restructuring and job cuts. Effectively Azman and the board of Khazanah were caught in the middle of a perfect storm. As Managing Director, it was his job to steer the good ship MAS safely through it.

Nor did it help that MAS suddenly became a sponsor of Tony's QPR. That did not look quite right. Too cozy.

The other issue that drew attention with the share swap was the way it was presented. The deal was negotiated in a shroud of secrecy, and when it was finally unveiled the focus was on the share swap and ownership changes rather than the key strategy. Missing from the way Khazanah communicated was the underlying rationale for the swap, namely the Common Collaboration Framework (CCF).

The CCF should have been the centre-piece of the deal, and these benefits should have been better communicated to both staff and trade unions. The share swap should have been explained as a consequence of the need for collaboration rather than as the priority.

Call it a flawed communication. It was the communication of the swap that was the problem perhaps rather than the deal itself.

Of course it did not help that the share swap coincided with appointment as ED and COO of MAS of Rashdan Yusof, a former business partner at Binafikir of Azman himself. Given the way Rashdan had been involved in some controversies that made it into the blogosphere about getting his maid and infant upgraded to First Class, again this was neither great timing nor great communication.

Meanwhile, quarterly losses from MAS dragged Khazanah's overall performance down – but only just, and it was in a strong position come year-end.

But of course MAS isn't the only issue that Azman has come under fire for. His GLC transformation programme has hit a few bumps lately.

Even with good investment over the years for Iskandar, there was a black sheep in the IRDA family - the Medini project.

Abu Dhabi-based Mubadala Development Co had promised some RM 2.1 billion for Medini Iskandar, not long after Azman took over at Khazanah. The plan was to jointly develop the 2,230 acre site.

Then the global financial crisis struck. And as you may remember, the Arab property market was hit hard. Their efforts at Medini were put on hold and consequently Iskandar Investment Bhd had to look elsewhere.

"If the Arabs are not willing to develop the land, we cannot let the project be left idle, there must be activity on the land. In fact, we had initiated this (to get other investors) who are from China, South Korea and also Japan to invest in the land," the IIB CEO, Datuk Syed Mohamed Ibrahim, insisted.

It's easy to disparage the project when it was compared next to the impressive figures that its other more successful ventures could show off.

And naturally that's just what many did – particularly the opportunistic set in the Opposition. They made it clear that that the problems stemmed from the corner office of Level 33, Tower 2, Petronas.

But perhaps there's some sense here and not all hot air? Perhaps Azman has made a few mistakes and perhaps now, or in the next few months, is a good time to move on to new challenges in life?

After all, it's already been nearly eight years since his appointment back in 2004, and he recently saw his tenure extended for another three years, with talk at the time of him holding the position beyond 2015.

The longer he stays, the more ammunition he provides a beleaguered Opposition who, in an election year, are clamouring for it.

Some have even suggested that if the rakyat give Najib as substantial a mandate at GE13 as is anticipated, then it would be the ideal time for the Prime Minister to relinquish the Khazanah Chairmanship he holds.

His role as Finance Minister would still see major decisions requiring the approval of shareholders coming through him. There is no reason to further expose him to the undue drama of an increasingly politicised situation.

So with the airline deal unwound, the next question could soon be whether Tan Sri Azman Mokhtar stays or goes at Khazanah.

Right now it would be wrong to push him out the door. But when looking beyond GE13, the rumour in Putrajaya is that as part of the winnable candidates policy, Azman may end up being brought into Cabinet. There, at least, he would be able to use his vast knowledge and experience for the rakyat, and have the collective wisdom of his Cabinet colleagues to rely on for advice and guidance.

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0 # Tun Sri Lanang 2012-05-15 14:03
Azman could be a winnable candidate but he also must have a political flair as he has his financial flair. Managing money and share is definitely not the same as managing people. Wrongly manage, it will be translated into GE14. Therefore, be careful to be a corporate person in the political arena.
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