Malaysia wants to sell stakes in Petronas
An office of Petronas in Kuala Lumpur, Malaysia. Reuters
Such a move may also give states such as Sarawak and Sabah a say in the running of Petronas, the world’s third-largest exporter of liquefied natural gas (LNG). Mahathir said the government could not meet a demand made by the states for a quadrupling of the royalties paid by the company to 20% of its profit.
“It’s fully owned by the government, it’s up to the government to sell the shares privately not in the market, to states like Sabah and Sarawak,” Mahathir said in an interview in his office on Tuesday.
“Petronas is a very big company, it depends on how much the states can pay also.”
Sarawak and neighbouring Sabah have Malaysia’s most prolific oil and gas reserves in their waters in the South China Sea. Their longstanding demand to increase royalties could cost Petronas up to $7 billion a year.
Petronas, formally known as Petroliam Nasional, is the biggest money-spinner for the federal government.
Mahathir said the government could also cut stakes in smaller listed or unlisted units of Petronas.
“What we need is to reduce our involvement, the number of shares that we hold, in order to raise some funds for ourselves,” he said.
The company’s main listed units are petrochemicals maker Petronas Chemicals Group, retail arm Petronas Dagangan, and gas infrastructure and utilities arm Petronas Gas. Petronas Carigali is its exploration unit.
On Monday, Petronas said it has completed block trades of its shares in Petronas Dagangan, Petronas Gas and Misc Berhad.
Mahathir is hopeful of reaching an out-of-court settlement with Goldman Sachs over the 1MDB scandal soon, but that compensation of “one point something billion” dollars offered by the bank was too small.
The Southeast Asian nation has charged Goldman and 17 current and former directors of its units for allegedly misleading investors over bond sales totalling $6.5 billion that the US bank helped raise for sovereign wealth fund 1Malaysia Development Bhd (1MDB).
Mahathir said they have demanded $7.5 billion from Goldman and negotiations were ongoing.
“We would like to avoid having to go to the courts, but if they come up with a reasonable sum I think we will agree,” Mahathir, 94, said.
“But at the moment their offer is too small. We’re continuing to talk with them to explain why they should pay what we demand. Of course it’s not the full amount, that they may be able to bring down, but we think that we can reach some agreement at a later stage.” A spokesman for Goldman declined comment.
Mahathir said he hoped an agreement with Goldman would be reached “soon”.
“Yes, I want to achieve a settlement. We are progressing, if we fail then we’ll go to the courts,” he said. “We cannot preempt by going to the courts.”
Goldman said in October it was in discussions with authorities on a possible resolution of investigations relating to 1MDB.
The bank could separately end up paying less than $2 billion to U.S. authorities to resolve criminal and regulatory probes connected to the scandal, Bloomberg reported last week.
US authorities say about $4.5 billion was siphoned from 1MDB, founded in 2009 by then-Malaysian Prime Minister Najib Razak. The scandal helped Mahathir unexpectedly defeat Najib in a general election last year.
Mahathir said Malaysia would not agree to a settlement with fugitive financier Jho Low, accused of playing a central role in the scam. Low has consistently denied wrongdoing and says he does not expect a fair trial in Malaysia as long as Mahathir is in power.
“We think he is very guilty. We have proof of that,” Mahathir said of Low. “We want to settle it according to the law.
Mahathir said Malaysian authorities have no contact with Low or his representatives and did not know where he is.
The US Justice Department said last month it struck a deal to recover $1 billion in funds allegedly looted from 1MDB from Low.
Mahathir Mohamad, the world’s oldest prime minister, promised on Tuesday to hand over power to anointed successor Anwar Ibrahim in spite of new allegations against him.
Mahathir said that he would not hand over before a summit of Asia-Pacific Economic Cooperation (APEC) countries that Malaysia is to host in November but could be ready after that.
“I made a promise to hand over and I will, accepting that I thought that a change immediately before the APEC summit would be disruptive,” Mahathir said.
“As far I’m concerned, I’m stepping down and I’m handing the baton to him. If people don’t want him, that is their business, but I will do my part of the promise... irrespective of whatever allegation. I made my promise, I keep my promise.” Asked if a handover could come in December 2020, Mahathir said: “We’ll look at that when the time comes.”
The turbulent relationship between the two men - allies turned fierce rivals who later reunited to win power - has shaped politics in the country for decades.
Mahathir was unexpectedly elected in 2018 as the head of a coalition government whose largest party is led by Anwar, 72, who has been jailed twice on separate counts - charges he says were political.
Reuters
