By Jose Barrock
Mohd Hazem Abd Rahman
Hazem Abdul Rahman is now in the spotlight, as the CEO of 1 Malaysia Development Bhd—a position he came into after former CEO Shahrol Halmi left suddenly to join the Performance Management and Delivery Unit (Pemandu).
A former analyst with Deutsche Bank, Hazem joined 1MDB as chief operating officer in August last year. Prior to that he was with Sime Darby Bhd’s unit Auto ConneXions Sdn Bhd where he was the CEO.
Shahrol meanwhile has already joined Pemandu and has been working there since last week.
Analysts and observers were puzzled with the move and the haste with which it happened.
“Why would Shahrol leave 1MDB where all the action is, all the exciting mergers and acquisition opportunities—to head Pemandu, which oversees the implementation and facilitates the progress of the Government Transformation Programme and the Economic Transformation Programme?” an analyst asked.
However, Shahrol will remain a director of 1MDB.
Shahrol had a stint with Accenture Malaysia’s public service practice, and had spent more than a decade doing IT transformation and integration, and played a role in the merger of Sime Darby, which created the giant plantation company it is today. He has also led transformation programs at the Employees Provident Fund.
A director of a government linked company (GLC) thought that the move was not unusual.
“It’s actually no big deal— both Pemandu and 1MDB are controlled by the Ministry of Finance. It’s more like a shuffling of people…it’s not like he (Shahrol) left the system. Don’t read too much into things,” he said.
1MDB over the span of a year acquired power generation plants—starting with an RM8.5 billion purchase of tycoon T Ananda Krishnan’s Tanjung Energy (in early March last year) which has assets in Malaysia, Pakistan, Sri Lanka, Egypt, United Arab Emirates and Bangladesh, and in August 2012 acquired the power generation assets of Genting Bhd for RM2.3 billion. There has been talk of other power assets being taken over as well, but it is still conjecture at press time.
In July last year 1MDB also announced that it will be the master developer, spearheading the RM26 billion gross development value Tun Razak Exchange, which will involve the setting up of a financial district on the 24ha site in Jalan Tun Razak.
These huge investments were made under his watch.
Hazem came on-board 1MDB only in August last year— after the acquisitions were either concluded or as good as in the bag.
Shahrol Halmi
“Maybe Shahrol should have stayed on, just for completion sake…some of the acquisitions did raise eyebrows,” a market observer opined.
While the RM8.5 billion Tanjung buy was not frowned upon, 1MDB’s RM2.3 billion acquisition of Genting’s power assets received much flak.
Genting in its announcement to the local bourse had said its power assets were “one of the first generation independent power producers in Malaysia. Although its power purchase agreement is due to expire in 2016, the plant is well maintained and can continue to be operated efficiently beyond 2016.”
Genting added that it had submitted an extension proposal to the Energy Commission.
Interestingly enough, in its announcement as well, Genting said that it would be making a one off net gain of approximately RM1.9 billion.
The observer added, “Maybe 1MDB should have waited for the concession to expire and buy it then, for much cheaper.”
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