[UPDATED] Anwar explains MAHB deal to MPs, says GIP accepts strict criteria

KUALA LUMPUR – Global Infrastructure Partners (GIP) had agreed with conditions set by Khazanah Malaysia Bhd relating to Malaysia Airports Holdings Bhd’s (MAHB) restructuring exercise, said Prime Minister Datuk Seri Anwar Ibrahim. 

Addressing the Dewan Rakyat today, Anwar said GIP, which is set to be acquired by US investment fund manager BlackRock Inc, was chosen for the proposed deal based on its willingness to comply with the national sovereign wealth fund’s stringent criteria. 

Anwar said Khazanah had informed that while 145 companies had initially applied to be involved in the consortium to manage MAHB, only five had fulfilled requirements. 

“Khazanah had set strict conditions, including that the chairman and CEO of MAHB must be Malaysians and that the majority shareholder must also be Malaysian. A lot of other companies did not agree with these terms, which is why GIP was chosen,” the prime minister said. 

Under the proposed deal, GIP alongside the Abu Dhabi Investment Authority (Adia) will own 30% of MAHB’s shares through a consortium led by Khazanah via its wholly owned subsidiary UEM Group Bhd and the Employees Provident Fund (EPF). 

While GIP and Adia are consortium shareholders, the remaining 70% of shares in MAHB will be held by Khazanah and EPF.

On May 15, the consortium had announced a pre-conditional voluntary offer to acquire all the shares in MAHB not already owned at an offer price of RM11 per share. 

The deal has courted controversy in Malaysia due to BlackRock’s supposed involvement with weapons companies supplying arms to Israel in its war against the Palestinian people.

Responding to accusations of “abandoning” Malaysia’s pro-Palestine stance by working with GIP, Anwar said the previous Perikatan Nasional administration in 2021 oversaw deals involving BlackRock and EPF. 

The prime minister also highlighted how BlackRock already has an RM20.5 billion stake in the Bursa Malaysia share market, including big companies such as Telekom and Petronas, as well as around RM7 billion in government and corporate bonds. 

“The government now is being attacked by the opposition (due to the proposed MAHB deal). Have they forgotten an important decision on February 26, 2021, when Pagoh (Tan Sri Muhyiddin Yassin) was prime minister, allowing BlackRock a role here?

“The decision allowed BlackRock to be a funds manager for the world’s first and biggest shariah-compliant direct investment and co-investment private equity separately managed accounts with an allocation of US$600 million or RM2.5 billion. 

“Congratulations. At that time, if you ask me now, I’d defend the decision and not make it into a political issue. I’m sure EPF reported to (Muhyiddin) and the cabinet then that this (BlackRock) is just an investment company,” Anwar said. 

Asserting that BlackRock was already associated with pro-Israel sentiments then, he added that Khazanah had only held talks with GIP and not BlackRock – unlike the 2021 deal between EPF and BlackRock. 

The prime minister also said there are no security concerns related to the deal as the Malaysian airports under MAHB’s management will still belong to the government while Khazanah and EPF will have increased stakes under the consortium. 

“EPF has invested with GP in infrastructure assets since 2012, with the cooperation including Australia’s Sydney airport and London’s Gatwick airport. 

“Looking at our airports’ capacity and management now… there are some profits recorded but the projection is far lower compared to the achievements by our neighbours’ airports, such as in Singapore, Thailand and Indonesia.”

Previously, GIP’s head of transport, Philip Iley, said BlackRock would not be involved in transactions relating to MAHB’s privatisation exercise.

He added that although BlackRock’s plan to acquire GIP is expected to be finalised by the third quarter of this year, GIP’s existing leadership team would retain full control and responsibility for the strategic direction and operation of the company. – June 25, 2024