Monday, May 25, 2009
After Omar Ong, Syed Hamid rumoured for Petronas Chairman?
If last week saw Omar Ong being appointed on the Board of Director (BoD) of Petronas, the Kuala Lumpur City Centre, where Petronas headquarter is located, is a buzzed with rumours that former Minister, Dato Seri Syed Hamid Albar will be appointed as Chairman of Petronas.
These two appointments are not expected to go down well with the public and corporate circle. If the two appointments are publicly announced, it could come at an expensive political cost to Najib. His first 100 days as Prime Minister has not brought the profound boost hoped by UMNO members and these appointments would invite more negative perception of his premiership.
Since its establishment by Tun Abdul Razak in 1974, Government has maintained an unwritten rule that the management of Petronas is free from any direct or indirect political interference and be run professionally. This has proven to be a successful formula vis-a-vis other state run organisation.
The practise has also been that members of the BoD of Petronas is limited to Government representative from the civil servants and top executives in Petronas for their professional input on the oil and gas. (See the current line-up here.)
The only exception being Tan Sri Ananda Krishnan, who was invited to help established Petronas at its inception. He was then an established player in the regional oil and gas trade and brought in by the then Chairman of Petronas, Tengku Razaleigh Hamzah.
The presence of former Minister, Syed Hamid as Chairman and Omar Ong as member of the Board of Directors will not auger well for Najib's public image.
Words are that the justification used to appoint Syed Hamid is his experience as Foreign Minister. This is felt by many observers as odd since the international relation role will be better served by the current Petronas Adviser, Tun Dr Mahathir Mohamad.
Dr Mahathir commands a strong respect in the Middle East and Third World countries. Petronas overseas ventures came about during his premiership. He was known as the number 1 salesman of the country.
Syed Hamid's stinct as Foreign Minister was marred by his failure to defend Batu Putih from Singapore’s claim. He was alleged to be involved in a company selling sand to Singapore. This became a factor in the cancellation of the scenic Johor Bridge that caused much uproar amongst Johorean.
Petronas is doing much in road into the Middle East. As told by a former Senior Minister, Syed Hamid is not known for his good personal relations with Arab leaders.
The perception of the few Petronas executives spoken on Omar Ong’s presence were generally negative.
He will be perceived as “the voice of the Prime Minister” and this will exert undue influence on other members of the BoD, particularly the representatives from the various Ministries.
This could invariably lead to Omar Ong directly interfering in operational matters of Petronas. He has tendency to be persistent and this will be the manner he insert his liberalisation "agenda" into Petronas.
Petronas has been successful because it was able to carryout it’s policy and implement it’s plan without interference from external parties. It’s system and procedures of check and balance is in place and working well. There is no need for interference, real or perceived, from other power at be.
The last Petronas need is interference from it’s former scholarship holder with limited working experience and textbook knowledge of the oil and gas industry.
Other than Petronas, another organisation that has proved successful with a “no political interference policy” is Permodalan Nasional Berhad. The BoD of PNB is similarly limited to distinguished former high Government officials. and at one time, corporate men.
The economic and social contribution of both Petronas and PNB is too invaluable to the nation. Thus, it is important that such institutions be protected and run by capable and experienced professionals with governmental playing the policy monitoring role. The "taboo" for politicians or politicians' representative involvement in the management of both organisations should remain.
Furthermore, Petronas is increasingly dependent on international business. It can’t afford to tarnish its unblemished record with ‘amateurish’ mistake and god forbid, a financial scandal. The risk is too high to give the top positions in Petronas to inexperienced young wannabees and popularity motivated politicians.
Politically, this could be an expensive political cost to the Prime Minister and UMNO. He could be accused by opposition of introducing cronyism into Petronas and the generally sceptic public is likely to believe such allegations. The role to be played by Omar Ong and Syed Hamid could be played without being appointed on the BoD.
As it is, Najib should remain focus to turnaround the economy in order to regain public confidence to the party. He does not need to take unconventional decisions that will detour him from regaining the trust and confidence of the public.
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