Khazanah directors threat of resignation may have exposed entire board to liability for billions lost as a result of their "undated letter" misadventure.

by Ganesh Sahathevan

The eight other members of Khazanah Nasional who resigned
 (clockwise from top left): Tan Sri Md Nor Md Yusof, Tan Sri Mohamed
 Azman Yahya, Dato' Mohammed Azlan Hashim, 
Raja Tan Sri Dato' Seri Arshad Bin Raja Tun Uda, Yeo Kar Peng, 
Dato’ Dr Nirmala Menon, Dato' Sri Nazir Tun Abdul Razak, and 
Tan Sri Andrew Sheng Len Tao
. 

In a typically Malaysian move the chairman and directors of the  Malaysian sovereign wealth fund Khazanah have chosen to threaten to resign, sending Prime Minister Tun Mahathir undated resignation letters so that he can decide if they should resign.

The problem for the chairman and the board is this:it matters little what the PM does with their undated letters, their duty remains to the company and its shareholder.

Directors can of course resign at any time, and they do so by submitting written,dated ,signed letters of resignation to the company secretary. This "let the PM decide" maneuver does little more than convey to the shareholder that the board has gone on strike. While this may work for  coolies, it does not work for company directors.Directors who refuse to work are in breach of their duties as directors, and may be liable for the fall in share prices at Tenaga, Telekom and other Khazanah companies listed on the Bursa Malaysia,caused by their threat of resignation. Billions lost, all of which may be attributed to the board.

Khazanah Nasional managing director Azman Mokhtar (above) and eight other members of the Malaysian sovereign wealth fund's board have submitted their resignations to the government.PHOTO: THE STAR/ASIA NEWS NETWORK

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