The corporate missions of GLCs must be reviewed after the closure of Continental

Murray Hunter

The corporate missions of GLCs must be reviewed after the closure of Continental

GLCs have betrayed the interests of the Rakyat for profits

May 01, 2025





The Malaysian government gained control of Sime Darby in 1977 as part of “Malaysianisation”. A number of tactics were used to weaken British control, until Tradewinds (Malaysia) Sdn Bhd, a company backed by GLCs (PNB, KWSP) purchased enough shares to put Sime Darby under Malaysian control. In 1979, Sime Darby was moved to Kuala Lumpur, where it became incorporated in Malaysia.

Sime Darby became one of Malaysia’s brightest corporate GLC stars in the Malaysian government portfolio, containing a massive array of companies, which were added to. Sime Darby played a role in the New Economic Policy (NEP) to strengthen Bumiputera position within the Malaysian economy. Sime Darby’s mission in Malaysia was espoused as being Malaysian and helping Malaysians.

Sime Darby entered into a joint venture with the German company Continental AG back in 2003. Continental owned 51% and Sime Darby 49%. Sime Darby’s share was diluted to 31% in 2006, where Continental took full control in 2012. The original investment by Sime Darby was aligned with the rubber industry Sime Darby was involved in, and a tyre factory in Kedah would bring employment and prosperity to people in Kedah, which had a high incidence of poverty at the time.

Now that Continental has just announced the closure of the tyre plant at the end of the year and relocation to Thailand, with the loss of 950 jobs, questions must be asked about the real role GLCs are playing in Malaysia.

GLCs should be acting in the public interest. Its obvious this is not the case. Malaysia’s mega GLCs are acting as portfolio driven conglomerates, interested in profits rather than people.

A loss of 950 mostly skilled jobs around the Alor Setar area is a major blow to the local economy. There is no other industry large enough to absorb the layoffs. Families will suffer, and even if there are jobs, workers will have to retrain to gain more skills. TVET is weak and cannot absorb those numbers and provide skills that are immediately marketable for the laid-off workers.

In retrospect, if Sime Darby was really interested in helping communities around the country, it would have maintained equity in Continental to keep the company in Kedah. From this perspective GLCs are not carrying out their corporate activities to benefit Malaysians, they are acting on introspective corporate greed as a driver.

We look at the closing of continental and sell off of MAHB, what’s going on with these GLCs? Maybe the government should not have such a strong commitment to such vehicles, if they are not really participating to development and growth of the nation today.