Putrajaya signals potential overhaul of GLC dividend policy as EPF investment performance remains firm
KUALA LUMPUR, Feb 24 — The government has indicated it may review dividend governance policies for government-linked companies (GLCs) to enhance transparency and ensure a balance between fiscal needs and corporate sustainability, said Deputy Finance Minister Liew Chin Tong.
He said Putrajaya is open to refining existing frameworks following questions raised about dividend decisions by certain state-owned entities.
According to him, dividend payouts are determined by company boards after assessing cash flow requirements, reinvestment plans, operational sustainability, and financial strength.
“Profitability alone does not determine whether dividends should be paid, as companies must also consider long-term financial commitments,” he said in Parliament.
He noted that Petroliam Nasional Berhad (Petronas) paid RM32 billion in dividends to the government for the 2024 financial year, highlighting its continued importance to national revenue.
He said this demonstrates the group’s overall strength, even as some subsidiaries retained earnings for operational and strategic purposes.
Liew said the government is prepared to review dividend policies to ensure state-owned companies remain accountable while maintaining financial resilience.
He said the review would aim to balance commercial independence with shareholder accountability.
He explained that several companies retained profits to support operational requirements.
Cenviro Sdn Bhd used funds to redeem RM100 million in preference shares and maintain liquidity.
Cradle Fund Sdn Bhd did not declare dividends due to cash flow constraints and reliance on grant funding.
IJN International Sdn Bhd retained earnings to finance expansion plans.
Several Sirim subsidiaries postponed dividend payments during restructuring and reinvestment phases.
Liew also addressed dormant GLCs, explaining they cannot be dissolved immediately due to outstanding debts and legal obligations.
He said these entities will be wound up once all liabilities are resolved.
On pension fund performance, he said the Employees Provident Fund (EPF) recorded RM2.271 billion in dividend and interest income from subsidiaries in 2024.
This income was distributed to members.
He added that losses recorded by some subsidiaries were largely accounting-related and linked to investment structures rather than weak fundamentals.
He said corrective measures are under way to enhance asset performance.
-wilayah.com.my
