THE government will reorient Khazanah Nasional Berhad, said Dr Mahathir Mohamad, as the sovereign wealth fund has strayed from its original mission.

The prime minister, who is also chairman of the fund, said Khazanah, which is one of the biggest local players in the stock market, was originally intended to hold shares allocated to Bumiputeras.

These allocations are under the former affirmative action policy to increase Bumiputera equity in the stock market.

“But along the way, Khazanah decided that it should take on the shares for itself. Why not buy if there are good shares at the time of listing when the price of shares was very low,” Dr Mahathir said in an interview with business website Investvine.

“So, they forget entirely about holding the shares for the Bumiputera. They decided on holding the shares forever as part of the (stable of) government companies.

“So they are no longer following the initial intention of the formation of Khazanah.”

Its website states that it is the government’s strategic investment fund, which holds and manages commercial assets owned by the government.

It also undertakes strategic investments on behalf of the nation and has interests in more than 100 companies in a number of sectors from power generation to healthcare to financial services.

As of December 2017, Khazanah has a realisable asset value (RAV) of RM157.2 billion while its net worth adjusted (NWA) is RM115.6 billion.

In its election manifesto, the new Pakatan Harapan administration, which Dr Mahathir leads, pledged to make government-linked companies (GLCs) a key component in increasing Bumiputera participation in the stock market.

The PH administration is reviewing all the shares Khazanah owns with a view towards re-orientating the fund to its original function – to hold equity on behalf of Bumiputeras.

“We will categorise (the shares) into ones that are profitable, the ones that are maybe profitable and the ones that are losing.

“We need to get rid of some of these companies to reduce their number and to certain extent, to go back to (Khazanah’s)  original intention of holding the shares allocated for the Bumiputeras until such a time as they can buy them.” – July 6, 2018.