February 8, 2024
KUALA LUMPUR – Twenty-three insolvent subsidiaries of agencies under the Rural and Regional Development Ministry are being closed down as there is no justification to keep them going, says Deputy Prime Minister Datuk Seri Ahmad Zahid Hamidi.
He said this was necessary even though the ministry’s subsidiary companies recorded an overall total profit after tax of about RM100mil.
“I will (also) change the heads (of subsidiaries) if they fail to deliver results without any good reasons,” said Ahmad Zahid, who also heads the ministry.
“I… appointed the leaders of (these) companies not because of your political affiliation. I put you there as you are professionals in your own right.
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“Do not take your appointments for granted as these are government companies which will be monitored and audited by the people every five years in the general election,” he said in a special address to subsidiary heads and management boards here on Monday (Feb 5).
The session with the top management of 123 companies within the ministry was conducted to emphasise the importance of their fiduciary responsibilities and the need to align with government priorities.
He also urged them to strengthen their respective companies and lower their dependence on the government.
“I am not threatening anyone, but (it should be noted) that after an analysis, I (am closing) 23 insolvent companies that were not giving the (expected) returns. These companies cannot be revived.
“I am looking at the other 100. For those who are still running but have yet to deliver, there are three ways to ensure your survival: through mergers, management buyouts, or creating joint ventures with outside companies.
“During the planned retreat in Johor this July, I will look at those companies to see whether they have bucked up or if we can buy them out or create mergers,” he said.
Speaking to an audience of about 1,000, Ahmad Zahid said the dividends paid out by companies under the ministry in 2022 totalled RM100mil.
He urged the top management and board of directors to improve communication to keep their respective companies moving forward.
“A high return is not only good for the company but also the government as it would then be returned to the masses. Great riches can come from great responsibilities.
“In the Madani effort to become a high-income nation, there is a need for proper management.
“As leaders, we must realise that failing to plan is planning to fail. We must set the ‘golden numbers’ in our goals to achieve them.
“Boards and CEOs must be articulate in their criticism and ideas. There are CEOs and boards of directors who don’t talk to each other,” he said.
He also urged government-owned companies to be more profit-minded so that they are able to expand.
“Loss-making companies that are burdensome will be closed. Successful companies can use their profits to expand,” he added.
He also named Risda Estate Sdn Bhd and Kesedar Perkilangan as examples of ministry subsidiary companies that made big profits, while companies such as Yayasan Pelajaran Mara also made a profit even while fulfilling a social agenda.
“Stop the conventional way of thinking.There must be a culture of assessment and… evolution,” he stressed.