Stake sale must fulfill best practices

THERE has been much talk about a possible sale of government assets as a means to raise funds to plug the holes created by the 1MDB scandal.

The idea of an asset sale is a welcome one. There is no point in being asset-rich and cash-poor.

Assets can always be acquired later when the country’s financial footing is stronger.

Today’s Khazanah Nasional Bhd represents the asset-rich phenomenon. The fund has built up the assets over the years through organic growth and acquisitions.

One of its biggest assets is IHH Healthcare Bhd, which had a market cap of RM42bil as of Friday.

The sovereign wealth fund’s 40.33% stake in the healthcare group is worth some RM16.93bil.

If you were to take Khazanah’s stakes in other companies such as CIMB Group Holdings Bhd, Tenaga Nasional Bhd, Axiata Group Bhd and Malaysia Airports Holdings Bhd into consideration, they are likely to be a significant amount even if the fund were to pare down part of its shareholdings. This can go a long way in reducing the country’s crippling debt problem.

Of course, there is the fear that selling these assets would mean the country losing some aspects of its sovereignity, or that it will lose assets that it may never be able to buy back.

So, a middle-ground approach ought to be taken - sell the assets which are not core to the running of the country.

Most importantly, all sales should be done above board, fulfilling the highest best practices so as not to have any preferential treatment of bidders.