PM Anwar in political bind over Malaysia government's US$230 million 'bailout' of Sapura Energy
Malaysia Prime Minister Anwar Ibrahim is taking the heat for rescuing debt-laden oil and gas services firm Sapura Energy. Observers say it may set a dangerous precedent for other companies unable to meet their obligations.
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KUALA LUMPUR: Malaysia’s controversial US$230 million (RM1.1 billion) lifeline to Sapura Energy Bhd, a one-time high-flying oil and gas services company with a global reach, has triggered a public debate over Prime Minister Anwar Ibrahim’s long-standing pledge of ending bailouts of troubled companies using public funds.
Financial executives, opposition politicians and Anwar’s own backers are slamming the proposed state-sponsored rescue because they say the plan is laced more with political motivations rather than real economic rationale.
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“Sapura is bleeding financially, and this injection will have to be the first of many through handouts (in the form of contracts) from Petronas to keep it afloat,” predicted a consultant at a boutique financial consultancy in the capital Kuala Lumpur, referring to the national oil corporation Petroliam Nasional Bhd.
Hassan Abdul Karim, an elected parliamentarian from Anwar’s own Parti Keadilan Rakyat political party, said the cash injection into Sapura Energy fit the definition of a “bailout” no matter how the government presented the rescue plan.
In statements to the local media, the Member of Parliament for Pasir Gudang constituency in Johor cited the Cambridge Dictionary when referring to the definition of a bailout and noted its closest equivalent in the Malay language would be “menyelamatkan”, which roughly means “is to save”.
Other politicians from both the ruling coalition and opposition have similarly weighed in on the saga.
Anwar, who has been criticised for the slow pace of economic reforms since taking over as premier in November 2022, has denied that the rescue of Sapura Energy is a bailout and strongly rejected criticism of the government’s move.
