Malaysia to tighten governance rules for state-owned enterprises

KUALA LUMPUR — Prime Minister Anwar Ibrahim has announced plans for new legislation to strengthen oversight and governance standards at government-linked companies (GLCs) and government-linked investment companies (GLICs), aiming to prevent costly financial missteps.

The proposed regulatory framework comes in response to substantial losses incurred by state-linked entities, particularly the controversial Battersea Power Station investment in London and the collapse of eFishery, a Malaysian aquaculture technology venture that once held unicorn status.

The government has identified governance weaknesses as a key factor in these investment failures, prompting the decision to implement tighter controls over capital deployment and decision-making processes within state-owned enterprises. The new legislation is expected to establish clearer accountability mechanisms and enhanced due diligence requirements for major investment decisions.

Officials have not yet announced a specific timeline for the legislative proposal, but the announcement signals the administration's commitment to improving stewardship of public assets and restoring investor confidence in state-linked entities. The measures are part of broader efforts to enhance transparency and operational efficiency across Malaysia's government-linked sector.