KUALA LUMPUR: Government-linked investment companies (GLICs) in Malaysia are allowed to invest in a wider range of investment classes, including options, private equities, and investments outside the country, says Finance Minister II Datuk Seri Amir Hamzah Azizan.
He also told the Dewan Rakyat today that non-GLIC statutory bodies such as public universities were only allowed to focus on low-risk, stable investments that yielded minimal returns, including fixed deposits and government bonds or sukuk.
"Each government statutory body (at the state or federal level) is regulated by its own enabling legislation.
"Not all government statutory bodies are permitted to make investments.
"If the enabling legislation of a statutory body does not empower it to make investments, then it should not engage in investment activities as such actions may be considered 'ultra vires'."
He said this in response to a question from Wong Shu Qi (Pakatan Harapan-Kluang) who asked whether statutory bodies and non-statutory bodies were allowed to invest in options, private equities and foreign exchange.
Amir added that some statutory bodies were required to refer to the Finance Ministry for approval on its investments.
"In considering the types of investments allowed for a particular statutory body, the Finance Ministry takes into account the mandate of the statutory body's establishment, investment risk management, and the investment expertise of the government statutory body.
"Federal statutory bodies with GLIC status such as the Employees Provident Fund, the Retirement Fund (Incorporated) (KWAP) and Lembaga Tabung Haji, have been mandated with core activities to make investments, and possess teams of officers with expertise in managing investment portfolios," he said.
However, Amir said there were risk controls and governance to reduce any risk of investment losses.
"For example, KWAP requires approval from the Finance Minister to appoint investment panel members and to invest in assets such as buildings and private equity.
"The Finance Ministry also limits the percentage of investments that can be made overseas."