Cetusan Revolusi

Petronas again rejects Najib’s bid to put aide on board

Posted on: June 28, 2009

KUALA LUMPUR, June 26 – Board members of Petroliam Nasional (Petronas) stood their ground this week and have politely turned down a bid by Prime Minister Najib Razak to admit a key political aide as a director of the national oil corporation.

Government officials close to the situation told The Straits Times that the board in a meeting on Wednesday had reaffirmed its decision a month previous not to admit Omar Mustapha as a director because he had defaulted on his scholarship loan agreement with Petronas two decades earlier.

The board, which was directed by Datuk Seri Najib to reconsider its decision last month over Omar’s proposed appointment, also decided it would send a delegation to brief the Prime Minister on the matter in the coming days.

Government officials familiar with the situation said the delegation would be headed by senior lawyers and a Petronas director, Abdul Kadir Kassim.

“I don’t think it is about his close ties to the PM. It has more to do with the scholarship issue,” said a senior government official, adding that Petronas took a firm view against scholarship defaulters.

Omar, 38, did not complete the required number of years of service with the oil corporation or a related government agency as stipulated in his scholarship agreement.

Petronas initiated legal proceedings against him in 2001.

Tan Sri Hassan Marican, Petronas chief executive and president, declined to comment on the issue when asked by reporters yesterday about possible changes to the board.

Government officials say that the Petronas board has briefed the company’s influential adviser, former premier Tun Dr Mahathir Mohamad, of its decision to reject the proposed appointment of Omar.

Tun Dr Mahathir had on Monday voiced reservations about Najib’s plan to appoint his aide to the board of Petronas, Malaysia’s sole entry in the Fortune 500 list of the world’s most profitable companies.

While acknowledging that it was Najib’s prerogative as premier to “appoint a man who failed to honour his obligation to Petronas when he was given a scholarship by it”, Dr Mahathir said in a written response to this newspaper that “generally I would say that it is not a good thing to appoint such a person”.

Petronas has established itself as an international energy player over the last two decades, and many industry experts and economists credit that transformation to the government’s hands-off approach in the running of the oil corporation.

That is why Najib’s bid to appoint Omar to the board raised eyebrows.

Omar has emerged as one of the closest political confidants to Najib and is often tapped for advice on economic and financial matters.

He graduated from Oxford on a scholarship from Petronas and worked briefly with the national oil corporation and another government-linked corporation. He then joined McKinsey & Co, working for the international consulting company in London and Malaysia.

He left McKinsey in early 2002 to set up his own consultancy firm, called Ethos, with several close friends and two years later was tapped by Najib, who was then deputy prime minister, to become his special officer. – The Straits Times

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