THE Madani government, of Prime Minister (PM) Datuk Anwar Ibrahim has introduced new terminologies and justifications to rationalise the bailout of troubled Bumiputera-linked companies.
The latest case in point is Sapura Energy Bhd which recently received a RM1.1 bil capital injection from the government through Management Development Holdings Sdn Bhd (MDH), a special purpose vehicle under the Minister of Finance Inc.
The official narrative suggests that this is not a bailout but rather a “strategic injection of redeemable funds”.
However, regardless of the terminology used, the reality remains that public funds are being used to rescue a failing corporation.
Complete U-turn
The irony is stark. Anwar, who once vehemently opposed bailouts when he was in the opposition, is now defending them in his PM capacity.
During Tun Dr Mahathir Mohamad’s tenure, Anwar was one of the most vocal critics of government interventions that rescued ailing Bumiputera companies – some of which were allegedly linked to Dr Mahathir’s family.
During that time, Anwar had insisted that any financial aid to struggling corporations should be subject to rigorous audits and public scrutiny to ensure transparency and accountability.
Has the government now subjected Sapura Energy to the same level of scrutiny before approving the RM1.1 bil injection?
There has been no clear confirmation that an independent audit was conducted to justify the decision.
Interestingly, despite the long-standing political animosity between Anwar and Dr Mahathir, the twice former prime minister has voiced support for the Sapura Energy bailout.
This is not surprising given that Dr Mahathir was the architect of large-scale bailouts during his time in power. His endorsement of the move could be seen as an attempt to remain consistent with his own past policies.
On the other hand, Anwar appears to be making a complete U-turn, embracing the very practice he once condemned. This raises the question if his policy is driven by economic necessity or political expediency.
Can Sapura Energy turnaround?
Sapura Energy’s financial troubles are well-documented. While it is now under new management, there is little indication that the company has a clear pathway to long-term financial viability.
The RM1.1 bil injection is ostensibly meant to pay off vendors, the majority of whom are Bumiputera-owned businesses.
But does this move address the root causes of Sapura Energy’s financial distress? There is also no clear mechanism to ensure that the government will be able to recoup the funds.
If Sapura Energy fails to achieve profitability, will the government continue pumping in public money under the guise of “redeemable” investments?
Echoes of 1MDB, short memory
Malaysia’s history is littered with financial scandals, the most infamous being 1MDB which resulted in massive public outcry and the conviction of former PM Datuk Seri Najib Razak.
The current administration spent considerable effort prosecuting those involved in financial mismanagement, yet it now appears to be following a worryingly similar path.
The key lesson from 1MDB is that poor governance and lack of oversight lead to disastrous consequences. Without transparency, how can the public be assured that this RM1.1 bil injection into Sapura Energy will not end up as another financial black hole?
It is difficult to ignore the political motivations behind this move. With Anwar’s support among the Malay electorate weakening, the government may see the bailout as a way to shore up Bumiputera economic interests or to counter opposition narratives that it is neglecting Malay businesses.
Dr Mahathir’s endorsement could also be part of a larger political strategy to mend fences with Anwar’s government – or at the very least – avoid being seen as opposing the economic interests of Bumiputera.
Ultimately, the Sapura Energy bailout – or “redeemable fund injection” as the Madani government prefers to call it – raises serious concerns about transparency, accountability and political consistency.
If the government is confident in the financial revival of Sapura Energy, it must provide a clear roadmap, independent audits and a transparent mechanism to ensure taxpayers’ money is not wasted.
Public trust in the government’s economic decisions is at stake. If bailouts like these continue without proper oversight, Malaysia risks falling back into the same cycle of financial mismanagement and crony capitalism that plagued past administrations.
The people of Malaysia deserve real solutions – not rebranded bailouts. – March 14, 2025
Former DAP stalwart and Penang chief minister II Prof Ramasamy Palanisamy is chairman of the United Rights of Malaysian Party (Urimai) interim council.
The views expressed are solely of the author and do not necessarily reflect those of Focus Malaysia.
