PETRONAS: Ingkar arahan Najib - Kontrak Hassan Marican mungkin tidak disambung

Petronas rebuff a ‘delicate’ issue for Najib

KUALA LUMPUR, July 3 — Prime Minister Datuk Seri Najib Razak has been rebuffed twice by the Petronas board over his plan to get a key aide appointed as a director — a rejection that his close aides see as an act of insubordination.

And Tan Sri Hassan Marican, the highly regarded chairman and chief of Petroliam Nasional (Petronas), is being accused privately of leading the revolt, industry officials say.

This has led to growing speculation that Hassan's contract will not be renewed when it expires in February next year.

Najib had wanted Omar Mustapha appointed as a Petronas director, but the board rejected his appointment because the 38-year-old aide had failed to honour a scholarship he received from Petronas, government officials say.

Still, under the Petronas Charter, the board is answerable to the PM, who has sole discretion over all of the firm's activities, including the appointment of directors and senior management.
While most bankers and government officials acknowledge that no individual is indispensable, in the close-knit global oil business, the ejection of people such as Hassan could have major repercussion, especially if such moves were read as political interference.

“How the PM deals with this will have serious ramifications both at home and abroad,” said the chief executive of a local state-controlled bank.

Petronas, the only Malaysian firm to make the Fortune 500 list of the world's most profitable companies, is one of the region's most globalised enterprises.

In a country where state agencies are often characterised by poor financial performance and less-than-transparent business practices, Petronas stands out for its sure-footedness.

Many private economists and bankers say the company attained its current standing because of the largely hands-off approach taken by the various administrations that have dealt with it since its incorporation in 1974.

From a home-grown regulator and the sole custodian of the nation's hydrocarbon deposits, Petronas has evolved into an international corporation with operations in more than 30 countries.

Its international businesses contribute more than RM100 billion in revenues a year. It is also a large issuer of bonds in international markets and its paper ranks higher than that issued by the Malaysian government.

“This whole thing has spun out of control,” acknowledged a businessman who has close ties to Najib. “It was just a board appointment and no one expected the Petronas board to have reservations.”

Several people close to Najib have said he is being advised to exercise his veto powers over Petronas and decree that the board should carry out his instructions to the letter. Anything less would be viewed as a sign of political weakness.

However, private economists and analysts say a hard-nosed approach to this delicate problem could pose numerous risks.

Petronas officials say privately that the company's international partners have voiced concern over the future of Hassan and other senior Petronas officials because of the widening public controversy over the face-off.

Rating agencies and international fund managers with Petronas bond holdings are similarly concerned, they say.

There could also be some political fallout for the Najib administration if the country's powerful civil servants feel his aides are muscling in on their turf.

“If the government is seen as interfering in the corporation's business, it will become ideal fodder for the opposition,” said a senior Umno official. — The Straits Times