Auditor-General Ambrin Buang took a jab at the government-linked companies (GLC) today for their poor practises which he said failed to inject check-and-balances and ultimately caused losses to these companies.

"We find that there are so many GLCs in the government sector and public sector. Some of them have been registered for years but their performance is at best mediocre," he said.

Emphasising that these poor practises of GLCs should be rectified, he pointed out that the lack of an internal audit mechanism and expertise were among their weaknesses.

GLCs, with all their access to state capital and assistance, enjoyed the privileges that distinguish them from private firms, thus they need to perform well, he noted

"But when they get into trouble, the first thing they go for is to convert loans into equities and then ask for more loans," he said adding that this ultimately forcing the state government to borrow from the federal government.

Ambrin ( photo ), who helmed the National Audit Department for nine years, also said some of the GLCs appointed inexperienced public officers to their boards.

"If you look at their structure and governance, it's certainly not best practice.

"Some of the GLCs don't even have an independent director. When you don't have the right people, then we will get into trouble very soon," he said.

He also criticised the GLCs for repeating the same mistakes without learning from the good practices of other GLCs such as Johor Corporation and PKNS.

"I brought up the issues few times [...] if something went wrong, you are not criminally responsible but don't you think you are morally responsible ?" he pointed out.

'Politically-correct decisions'

Ambrin's observations were made during a question-and-answer session of the International Conference on Governance, Risk and Control.

Meanwhile, Idris Raja Kamarudin, chairperson of Kumpulan Perangsang Selangor, a wholly-owned firm of the Selangor government, said the issue with GLCs was that minority shareholders and independent directors were ignored in the decision-making process.

And sometimes, the decisions were made as they were 'politically correct' rather than in the best interest of the corporation, he said.

"I find that the biggest challenges for GLCs is that they want to do things that are politically correct but sometimes this can spell financial disaster for these companies," he said.

"For example, (a GLC allocates) RM10 million for the villages. They (the state government or politicians) said we should do something good for the public, but the balance is missing," he said.

Idris Raja Kamarudin ( photo ), a British national and elder brother of controversial blogger Raja Petra Kamarudin, had drawn flak when he was appointed as the head of the state-owned company two years ago.

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