A Voice that's hard to ignore
As appeared in The Star, Friday, 28 October, 2005
TO THE POINT
A lawyer by training, politician by accident and corporate man by choice – that is how Datuk Seri Megat Najmuddin Megat Khas, 61, describes himself. The former Umno wakil rakyat is now into corporate governance and sits on the boards of a string of companies. On the lighter side, he also sails, listens to Italian opera and loves golf. But it is the way the president of the Malaysian Institute of Corporate Governance shoots from the hip on issues close to his heart such as corporate ethics, corruption and the state of the Malays that makes people sit up when he speaks. He did quite a bit of shooting in an interview with JOCELINE TAN and KHAW CHIA HOOI.
You wear so many hats. Does it give you a headache?
Megat Najmuddin: 'Race-based politics distorts the political system and leads to polarisation'That’s the story of my life but it’s all about time management. I was a lawyer for 14 years before I went into politics and the corporate world. Basically, I’m very no-nonsense.
Nowadays, I spend more time on Malaysian Institute of Corporate Governance matters than on my corporations. I am chairman of four public-listed companies and director of three others, all in a non-executive capacity. But I still have a passion for good corporate governance and integrity, for doing things the right way. I feel strongly about sound political leadership and policies.
Tell us about your foray into politics
My father was a founder member of Umno in Perak but it was my neighbour in Petaling Jaya, Mazlan Harun (son of former Selangor Mentri Besar the late Datuk Harun Idris), who talked me into politics. He asked me to help out in his division. One thing led to another and soon I was heading the Petaling Jaya Umno division – I won the post by just one vote.
I was appointed an MPPJ councillor for 18 years from 1981 to 1999. It was a long time to be a municipal councillor but it honed my political skills and my thinking about local governments. I think I know more about local governments than (Datuk M.) Kayveas. I agree with him to a certain extent when he said that it’s like a secret society. In fact, I can think of worse things to say about local governments than Kayveas ... but let’s leave that aside.
I was also assemblyman for Kelana Jaya from 1986 to 1995.
You are on the appeals committee of the Umno disciplinary board. You have strong views on money politics?
It’s not only in Umno, it’s in the whole political process, in almost every political party in the country. I was telling a DAP leader the other day that there is political corruption in Umno, MCA, MIC and even PAS which is in power in Kelantan. The only one left is DAP because they are not in power. If they are in power, they’ll find that there will be corruption in their party.
I think we’ve put the fear of God in them. The right signal has been sent to the membership – money politics or political corruption within Umno will not be tolerated. If the third most senior man in Umno can be set aside for money politics, what more others?
The Prime Minister has made a huge push against corruption
I think as far as the rhetoric from Pak Lah goes, he is absolutely correct. He is also trying to put some systems into place like the Malaysian Integrity Institute (MII). And now he’s looking at his own PM’s department, restructuring it to make sure it is more effective in its delivery system.
I think Pak Lah is serious. But what are we doing about it? What’s the Government doing? What are the civil servants doing? What are the rest of the Cabinet ministers doing? Pak Lah is trying his best and we must give him the support. We can’t allow the poor man to be shouting from the top of the mountain with nobody listening to him, nobody supporting him, nobody helping him.
I’m a member of the MII and also president of Malaysian Institute of Corporate Governance. I’m also president of the Federation of Public Listed Companies. I’m not a voice in the wilderness and I want him to know we want him to succeed. We want to see good governance practised within the corporate sector but it cannot work unless there’s good national governance.
You cannot allow corruption to go unchecked. You cannot have a corrupt civil service. Why should the corporate sector be clean and practise good governance if national governance is corrupt?
You have said that State Economic Development Corporations (SEDCs) should be abolished
I have been consistent on this. I’ve been saying it for years. I even said it at a conference of SEDCs in front of all those SEDC officials and the Johor SEDC chairman was there.
What is so special about SEDCs? What is it that they can do that others cannot? I don’t think they are efficient. Look at their record and the performance of all SEDCs in the country. At their best, they incur losses; at their worst, they are disasters. They create disasters – that’s what I said.
Has any SEDC done well?
None of them have shown any results. The Government has no business being in business, especially when they appoint government servants, state secretaries and state financial officers to sit on the board of directors in SEDC companies. How can government officers do business and be regulators at the same time? It’s a conflict of interest.
The SEDCs are chaired by mentris besar – again, a conflict of interest there. He’s a politician, the No1 man in the state and he’s doing business on behalf of the state at a time when we are talking about transparency. They should close down. Those employed there could be absorbed into the private sector like what has happened in Johor.
Johor has no SEDC, you know. It’s only a name. All their assets have been transferred to Johor Corporation, a public company. You can say Johor Corp is probably the most successful. They are into plantations in a big way, hospitals and other businesses.
Have you upset a lot of people talking like that?
Of course they get upset but they know where I’m coming from.
But there’s no point just being upset. You must argue with me, tell me why we should not do away with SEDCs. Is it because of the bumiputra interest alone? Why are they so keen to keep the SEDCs? Convince me. Why should there be a public stake in private business? The Government already has a 28% stake in businesses anyway. All businesses have to pay company tax, service tax and customs duties.
How do you unwind?
There’s golf. I’m a single handicapper. I’ve been playing golf since 1970. My other passion is sailing. I used to have two sailboats but now I have one. I’ve sailed around the peninsula, up to Myanmar. I love nature, I love the sea. Rugby has always been another passion because I used to play the game. I was a national player and I was the University of Singapore captain for two years. I also love music. It helps me relax and unwind. I’m not chauvinistic in my appreciation of good music, good food or beautiful women.
You often talk about Umno having to re-engineer itself
It’s time we move forward. Umno should open itself up to non-Malays like what (founder president) Datuk Onn Jaafar initially wanted. Race-based politics distorts the political system and leads to polarisation. Umno can be the United Malaysian National Organisation. What’s wrong with that? Do we lose our identity as Malays? Do you lose your identity as Chinese, as Indians if you become members of Umno? We will still remain who we are. People are scared when I talk like this. They say: “It’s easy to say because you’re outside but say that at the Umno general assembly and you’ll be politically slaughtered.” But we should think about it.
Are you influenced by your Chinese wife?
No. Actually, I studied at a totally Malay school, but my teachers were mostly non-Malays. But one thing about the Kuala Kangsar Malay College old boys – we are never racist.
I suppose we did not face racial discrimination like Malay boys did in the mixed schools, so we don’t have so much baggage. Don’t forget I was also educated in Singapore so that helped form my opinions and thinking. I was in university before the NEP, I had to compete with everybody else. They didn’t lower the passing mark for me to pass my exams, I had to compete with the Chinese and Indians and I didn’t have any inferiority complex in that regard. I could have been married to a Malay but my thinking would still be the same.
Umno Youth wants a revival of the NEP
There is some basis to the proposal. We have not met some of the objectives of the NEP but there’s not much point shouting to the world about it. It could have been done in a quieter manner, through consultation to address the shortcomings in the policy rather than politicising it and playing to the gallery. Everything could have been done in a more mature manner without exciting people negatively or alarming others. It doesn’t help the Malays in the eyes of the world.
If you keep on coddling them and giving them crutches all the time, they’re not going to come out from the subsidy mindset. The right way to go is to have some affirmative action but the way it is implemented has to be different. There must be meritocracy among the Malays.
To be honest, the average young Malay is rather embarrassed by all the publicity given to this matter. Many Malay professionals – lawyers, doctors, engineers – they don’t need crutches, they can stand on their own. When I graduated, there were very few Malay professionals in the country but look at them now, some of the top surgeons in town are Malays, top lawyers, top accountants. There’s nothing to apologise for so they’re barking up the wrong tree. But I can see it's about politics, this playing to the gallery.
The 30% target of Malay equity under the NEP fell short. It’s only about 12%
To me that's a big success because we started from zero. The 1997 Asian currency crisis decimated the Malay participation in the economy.
Many businessmen fell by the wayside although there were some who were very cavalier in their attitude. I can name you a few but I won’t. Some didn’t add any value to their companies, instead they took value out of the companies. I’m ashamed of these Malays but in the main picture, the Malays have learnt their lesson and a new crop of professionals are coming up – top class people, highly educated and sophisticated. They can stand on their own and compete with anybody. So all is not lost.
Do you miss frontline politics?
I don’t miss the hurly burly of active politics. It was stressful and very bad on my family. My kids were growing up when I was active in politics and I missed their growing-up years.
Politics is a 24-hour job and you have to deal with a lot of trivial and petty things as well. My wife was not interested in it, she never took part in anything, she stayed out of the way. But when there was sorrow on my part, she felt the sorrow. If there was stress, she felt the stress.
Tell us about the Malaysian Institute of Corporate Governance
The idea came from the Government and I was installed the first president and still am. We suffered a setback because of (Datuk Seri) Anwar Ibrahim. He was behind the idea as Finance Minister but when he was sacked it took time to put the MICG back on the government agenda because everything Anwar did was viewed with suspicion. We had to convince the new Finance Minister that this is the way to go.
We had been poorly funded from the word go, yet we were expected to move mountains. We didn’t move any mountains but we moved a few hills with the little funding we had. The MICG is supposed to be an advocacy unit as well as a centre of excellence for corporate governance. We also wanted to take on the role of training but the powers-that-be felt the education part should be taken on by the KLSE.
We thought of doing corporate governance ratings – whether they have corporate governance standards in their structures, in proceedings of directors’ meetings, in the proceedings of the officers in that company, the risk management, the internal control, things like that. But that went under the Minority Shareholders Watchdog Group, which I personally think creates a conflict of interest. They are representing the minority shareholders, so how can they rate companies which are not treating the minorities properly?
Do you feel like a lone voice?
Sometimes I feel like I’m shouting from the top of a mountain and the mountain is shouting back at me, like an echo. But having said that, we’ve also done relatively well. Malaysia is rated quite high, internationally, in terms of corporate governance.
We used to be somewhere at the bottom of Asia at No. 97, now we are somewhere at the top. The level of awareness in the corporate sector for good corporate governance is there. People accept that we need it but the question is one of better results and performance. Still much to be done there.
(Datuk Seri Megat Najmuddin is currently the Vice President of MCOBA 2005-2006 - Ed.)