The Prime Minister, Datuk Seri Najib Razak should present a ministerial statement in Parliament on Monday on various current Petronas issues – a new CEO, his insistence to appoint defaulter Omar Mustapha as Petronas director, declining Petronas profits and most important of all, a new regime of Petronas accountability to Parliament.
Recently, what is making waves in Petronas and well-informed local circles and reported internationally, though completely swept under the carpet by the local mainstream media, is the repeated attempts by the Prime Minister, Datuk Seri Najib Razak to force the appointment of his aide, Omar Mustapha as director of Petronas.
The Singapore Straits Times has reported that the Petronas Board of Directors has rebuffed Najib’s attempt to foist the appointment of Omar for the second time this Wednesday, as the Board was directed by Najib to reconsider its decision last month rejecting Omar’s appointment.
The reason for the Petronas Board’s rejection of Omar as director is that Omar had defaulted on his scholarship loan agreement with Petronas two decades earlier. Omar did not complete the required number of years of service with the national oil corporation or a related government agency as stipulated in his scholarship agreement. Petronas also initiated legal proceedings against Omar in 2001.
Najib should explain to Parliament why he is insisting on appointing a Petronas loan defaulter as a director of Petronas, as the widespread objections to Omar’s appointment to the Petronas, now taking up by the Board, is fully justified and valid.
Furthermore, why as a former Petronas officer, Najib is so reckless about the adverse effect on the morale of serving and dedicated Petronas officers that would result from the appointment of a Petronas defaulter to the Petronas Board!
Parliament should also be informed whether the Prime Minister is looking for a new Petronas CEO to replace Tan Sri Hassan Merican.
Earlier, the name of former Home Minister, Datuk Seri Syed Hamid Albar had been bruited as the likely new Petronas CEO. In the last few days, another name has emerged: Datuk Mohd Bakke Salleh, the Felda Holdings group managing director, and that he is to understudy Hassan until the present Petronas CEO’s retirement next February.
Although the final decision of the new Petronas CEO rests with the Prime Minister, MPs from both sides of the divide should be given the opportunity to give their views on the possible candidates.
Parliamentarians, whether Barisan Nasional or Pakatan Rakyat, must also be given regular updates of Malaysia’s only company on Fortune 500, especially as Petronas has just reported a net profit decline by 13.9 per cent due to low oil prices and high production costs.
The group reported RM52.5 billion in net profit compared with RM61 billion the previous year although its revenue increased by 18.4 per cent to RM264.2 billion compared with RM223.1 billion the previous year.
Petronas plays a critical and strategic role in the public finances of the country, as Petronas paid out to the government RM74 billion in the financial year ending March 31, 2009 compared with RM61.6 billion the previous year, an increase of 20.1 per cent.
The payment represented 71.4 per cent of the group’s profit before tax, royalty and export duty of RM103.7 billion. Of the payment, RM30 billion was in the form of dividends and the rest in taxes, royalty and export duty.
Petronas contributions amounted to RM72.5 billion or 45 per cent of federal government revenue in the 2008 calendar year.
This is a very high figure reflecting the government’s heavy dependence on oil revenue, a situation which may not be sustainable or ideal for a country trying to develop an economy based on knowledge and innovation.
Petronas represents the biggest chink in the government’s armour in its claim of accountability, transparency and good governance as the national oil corporation as presently constituted is totally not accountable to Parliament!
There is no annual Petronas report to Parliament. The Public Accounts Committee has not even dared to call up the Petronas CEO and President to give a proper accounting of his stewardship of Petronas.
If Najib is sincere in his motto of “1Malaysia, People First. Performance Now”, he should present to Parliament on Monday his proposal for a new regime of Petronas accountability to Parliament.so that there is meaningful monitoring and accounting of the petro-ringgit in Parliament.
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