Before Fashion Valet, there was the TELEKOM MALAYSIA debacle!

By Rizal Ramli

In 2018, Telekom Malaysia found itself entangled in a series of financial missteps that wiped billions off its market value and sent ripples through Malaysia’s economic ecosystem. This downturn wasn’t merely a corporate miscalculation—it highlighted structural frailties and painted a cautionary tale about the interconnectedness of Bumiputera businesses, vendors, and suppliers tied to Malaysia’s flagship companies.

The fall of Telekom exposed how politically driven leadership, often appointed without consideration for industry acumen, can erode value across a vast network. With a chairman lacking technical expertise, more skilled in pleasing those above than understanding the needs of those below, the company became an unfortunate test case.

Here, vendors and suppliers—many of whom were Bumiputera-owned small and medium enterprises—were sidelined or gutted as Telekom’s restructuring took a toll on local support industries. Many who’d relied on stable contracts saw their revenue streams vanish overnight, and these businesses, without sufficient resilience or diversified portfolios, began a freefall.

This wasn’t just an isolated incident but rather a harbinger of challenges later mirrored in other state-linked corporations like Khazanah Nasional and Permodalan Nasional Berhad (PNB), and eventually seen with high-profile start-ups like FashionValet, each representing the same cyclical issue of poor oversight, favoritism, and the prioritization of short-term gain.

Telekom’s losses foreshadowed what would become an endemic problem—a cycle of well-connected but ineffective leadership leaving a trail of lost potential in Malaysia’s corporate landscape. This issue demands systemic reform to sever the political ties that prevent these entities from achieving the strategic, value-driven growth Malaysia’s economy so critically needs.

In the aftermath of Telekom Malaysia’s financial stumble, swift action came with the removal of its chairman. Competent, skilled hands were brought in, and slowly, the organization found its footing, restoring stability to its operations. Yet, in the curious way that Malaysia’s corporate and public sector overlap, the former chairman—despite a record that can best be described as spotty—seems to have come out unscathed. With a string of failed initiatives and unremarkable legacies trailing behind, he somehow continues to resurface in the corridors of power, tasked with ever-larger responsibilities.

Here lies a unique phenomenon in Malaysian governance: retired civil servants rarely seem to step aside for good. Instead, they reappear in recycled cycles, often in strategic positions despite questionable qualifications. Their tenures serve as symbols of Malaysia’s enduring patronage culture, where loyalty to connections, rather than tangible achievements, often carries the day.

The resilience of such figures, buoyed by long-standing networks, speaks to a broader challenge—the inertia within Malaysia’s leadership structures that rewards affiliation over accountability, sending a message that in Malaysia, career setbacks aren’t final but rather preludes to new appointments, often with greater stakes and responsibilities.

Rizal Ramli is an observer Of Southeast Asian Affairs

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