KUALA LUMPUR – Putrajaya’s decision to grant U Mobile Sdn Bhd the licence to deploy Malaysia’s second 5G network has raised questions about the constitutionality of the monarch’s shareholding in the company.
While Article 34(3) of the Federal Constitution provides that the Yang di-Pertuan Agong shall not actively engage in any commercial enterprise, lawyer Srimurugan Alagan was of the view that the words “actively engage” do not cover mere shareholding.
Speaking to Scoop, Srimurugan also explained that under the law, shareholders also have a separate legal personality from the company they have stakes in.
“The (legal) personality that does the business the company and the brains would be the board of directors,” Srimurugan told Scoop.
Simply put, the lawyer explained that the constitutional provision used the words “actively engage” possibly to prevent a monarch from being distracted from his official duties with business affairs.
“But the monarch shouldn’t fall into the category of ‘actively engaged’ by merely being a shareholder,” Srimurugan explained.
Meanwhile, lawyer Kuhan Manokaran acknowledged that discussions about royal involvement in the commercial sector can be difficult, pointing out that the matter is also complicated in monarchies such as the United Kingdom.
“Even in the United Kingdom, the involvement of royals in business is a difficult topic.
“It was reported previously in Britain that the Royal family had many commercial interests and this is usually done through a trust.
“How involved the monarch was or the members in the royal families were in the operations or decision of the company is unknown.
“However, in the past, this has brought about a host of issues, particularly when it comes to issues of land or tax,” Kuhan told Scoop.
At the federal level, Kuhan explained that the country’s laws do not appear to expressly prohibit state rulers from owning shares in a company, but mentioned that the constitution does place limitations on the Yang di-Pertuan Agong’s active involvement in commercial activities.
With regard to states, Kuhan said that the state constitutions of the nine Malay rulers did not adopt provisions similar to that of Article 34(3).
Instead, on July 4, 1992, six of the nine rulers signed a ‘Proclamation of Constitutional Principles’, which states that monarchs shall not actively engage in commercial enterprises, except through trusts.
Notably, Kuhan said that the Sultans of Johor, Kedah, and Kelantan did not sign the proclamation.
“So, I suppose when it comes to the Agong, the distinction lies in what constitutes active involvement,” Kuhan added.
On November 6, the Malaysian Communication and Multimedia Commission (MCMC) awarded U Mobile a licence to implement a second 5G network in Malaysia.
The move drew backlash from the opposition with Tasek Gelugor MP Datuk Wan Saifulruddin Wan Jan alleging the process of awarding the licence to U Mobile lacked transparency and questioned the need for a second 5G network.
Following the controversy, it was also revealed that U Mobile’s shareholders feature foreign owners such as Straits Mobile Investments Pte Ltd which is linked to Singapore’s Temasek Holdings.
Yang di-Pertuan Agong Sultan Ibrahim Sultan Iskandar also has a 22.31% ownership in the company.
On November 7, Communications Minister Fahmi Fadzil told the Dewan Rakyat that MCMC’s decision to award U Mobile the licence had nothing to do with their shareholders.
The Lembah Pantai MP said that MCMC took into account detailed technical and commercial considerations before appointing U Mobile, with the process conducted through an open tender. – November 25, 2024