NEP poster boy, but now....

NEP poster boy, but now....

Posted by Raja Petra
Saturday, 15 March 2008, MT



In the end, there are critics in Malaysia who believe that while Mr Anwar and his acolytes, such as Mr Khalid, may be willing to give up the form of the NEP, they would ultimately put forth other alternatives that will continue to benefit Malays.

Leslie Lau, TODAYONLINE

MR Khalid Ibrahim took office this week as the Chief Minister of Malaysia's richest state, Selangor, bringing with him a wealth of corporate experience that is at odds with nearly everything he now says he stands for.

Managing the coffers and development of the country's dynamic industrial hub - with its biggest ports and the nation's capital city Kuala Lumpur plus the administration centre Putrajaya located within its border – pales in comparison to his previous jobs.

Mr Khalid was, after all, until his ouster in 2003, the chief executive officer of Guthrie, the 200-year-old plantation giant that has recently merged with the Sime Darby group. When he was at the helm, Guthrie was already worth billions of ringgit.

Before that, he was also the CEO of PNB, the country's national equities board, a government agency that manages billions of ringgit in funds. This was done as part of the New Economic Policy (NEP), the affirmative action programme meant to, among others, increase the holdings of bumiputra (Malays and other sons of the soil) in the share market.

Mr Khalid, now 61, was also one of the NEP's most prominent poster boys and a close ally of Mr Anwar Ibrahim, who was then the Deputy Prime Minister and Finance Minister. Under Mr Anwar's patronage, Mr Khalid became one of the wealthiest beneficiaries of the affirmative action programme.

When he joined Mr Anwar's Parti Keadilan Rakyat in 2006, he said in an interview the NEP had become a scheme "to enhance the incomes of certain selected members of the community".

This week, following the victory of the three-party coalition – Keadilan, Democratic Action Party and Parti Islam SeMalaysia in Selangor, Mr Khalid pledged his new government would "change" the NEP into a more "equitable wealth distribution" system.

He did not say how he would do that.

Doing away with the NEP has been part of Mr Anwar's script in his comeback run.

In the end, there are critics in Malaysia who believe that while Mr Anwar and his acolytes, such as Mr Khalid, may be willing to give up the form of the NEP, they would ultimately put forth other alternatives that will continue to benefit Malays.

For now, Mr Khalid has had a warm welcome in Selangor, and is widely regarded as a breath of fresh air.

However, there are questions regarding Mr Khalid's character, based on his history in the corporate world.

The manner in which he took over the helm of Guthrie in 1994 came under fire as cronyism, more so as it involved government funds. Besides his appointment as CEO of Guthrie by PNB, the majority owner of the plantation company, he was given the option to buy a 5-per-cent stake in the company.

PNB offered Mr Khalid the 5-per-cent stake, or 50 million shares, at RM2.50 ($1.10) a share, or RM125 million. On the day of the offer, Guthrie stocks closed at RM3.96. This resulted in a windfall for Mr Khalid, on paper, of more than RM73 million - in just one day.

Of course, his supporters reckoned he deserved the windfall then. They argued that Mr Khalid was "the saviour of the Malay race", a myth he did not attempt to dispel when he led Guthrie.

In 1981, as a young analyst with PNB, Mr Khalid was part of a PNB team that caused ripples internationally, when it wrested control of Guthrie through a multi-billion-ringgit "dawn raid" on the London Stock Exchange - landing the British company into Malaysian hands.

During his tenure at Guthrie, Mr Khalid presided over unprecedented expansion, as the company, among other things, developed large tracts of land in Indonesia for palm oil. While Guthrie shares continued to rise, it also began accumulating major debts.

In 2003, no longer under Mr Anwar's protective shield, Mr Khalid was ousted from Guthrie, under a cloud. Despite much speculation, nothing has been confirmed or revealed publicly.

In 2006, as Mr Anwar started planning his political comeback, he recruited his old protege Khalid back into his kitchen cabinet of advisers. Mr Khalid became Keadilan's secretary-general.

Last year, in his maiden voyage into politics, he stood as a candidate in a by-election in Selangor but lost.

Incidentally, just days before polling, he told voters, "don't forget to vote for Barisan Nasional", instead of his own party, Keadilan. Was this just a Freudian slip or was it due to his past support of the ruling coalition?

Last week, he contested in the same state seat and won.

History repeats itself for Mr Khalid. This time, though, his quick rise is not in the corporate world but in the changing world of Malaysian politics.

The writer has been reporting on Malaysia for more than 15 years.