A PANEL is already reviewing several candidates to succeed Azman Mokhtar as the Khazanah Nasional Bhd managing director when he leaves in 2019, and among them include Arul Kanda Kandasamy who now heads 1Malaysia Development Bhd (1MDB), say sources.

The Malaysian Insight has learnt that Arul of the sovereign wealth fund is one of two outsiders being considered for the job, the other being Tengku Zafrul Aziz who leads Malaysia’s second largest lender CIMB Group. CIMB is a unit of Khazanah.

“A selection panel has been formed to look through the candidates who can take over from Azman whose his contract expires in two years,” a source told The Malaysian Insight.

Those within the Khazanah leadership on the shortlist to succeed Azman include executive directors Hisham Hamdan, Ahmad Zulqarnain Onn and Tengku Azmil Zahruddin Raja Abdul Aziz.

The panel reports to Khazanah chairman Najib Razak, who is also Prime Minister and the Finance Minister.

“There is little to separate the candidates so the selection panel has started its work early to ensure the successor has time to understudy Azman,” another source said. 

Azman has been Khazanah managing director since June 2004, after he left the boutique advisory company BinaFikir Sdn Bhd which he co-founded in 2002.

BinaFikir planned the wide asset unbundling exercise (WAU) for national carrier Malaysia AIrlines after the government bought back the loss-making airline from telecom tycoon Tajuddin Ramli. It has gone through several management shake-ups and bailouts since then and has been taken private.

But Azman has found more success in Khazanah, turning it a key state fund that has total assets of RM145.1 billion as of end 2016 when it recorded a pro-forma profit before tax of RM1.55 billion.

Khazanah owns shares in some 70 companies including blue-chips CIMB Group, Telekom Malaysia, Axiata Group, Tenaga Nasional, TIME dotCom, Malaysia Airports, IHH Healthcare, and UEM Group. 

Sources noted that anyone succeeding Azman will have big shoes to fill and the preferred successor would be someone familiar with Khazanah’s operations and management style.

But one source said Arul Kanda is being considered for his handling of the 1MDB rationalisation plan which he implemented after taking over the debt-laden state investor in January 2015. He managed the sale of land and other assets to generate funds to pay off 1MDB’s RM42 billion debt.

1MDB still owes Abu Dhabi sovereign wealth fund US$1.2 billion (RM5.1 billion) under an arbitration settlement as its rationalisation plan has been held up by delays in the Bandar Malaysia project.

Among the other candidates for the top Khazanah job, Tengku Zafrul is a career investment banker who has been with CIMB since January 2016 after leaving Maybank Investment Bank.

The other three from within Khazanah are seen to be safe choices as they have been working with Azman through the years since professional managers took over managing the sovereign wealth fund from civil servants.

It is not yet known when the final selection will be made but it could be as soon as the start of next year to ensure a smooth handover in 2019, when Azman clocks out after 15 years at the top. – August 10, 2017.