Ashiqin Ariffin
KUALA LUMPUR: It is legally not wrong for Gamuda Bhd group deputy managing director Rashdan Yusof to double up as chairman of the Energy Commission (EC), industry sources said.
Rashdan's appointment might be a conflict of interest but it was one that was allowed by the law, they said, referring to the Energy Commission Act 2001.
Some quarters had expressed concerns about a conflict of interest given that Gamuda was already involved in the renewable energy (RE) business.
They noted that Gamuda was a major player in the RE sector. Last December, the company reportedly announced that it was spending RM2 billion to grow the segment.
The sources said the EC was primarily set up to regulate policies determined by the Natural Resources, Environment and Climate Change Ministry.
The commission would inform the public about any changes within the energy sector, and was not involved in policy-making or making any decision regarding energy policy in the country, they added.
"Legally, Section 11 of the Energy Commission Act 2001 explicitly states that the person appointed as the member of the commission is required to make a statutory declaration if he or she has any interest, financial or in any way related to any activities involving energy supply," one source said.
Rashdan had declared his affiliation related to the business nature of the commission, the source added.
Another source said this was not the first time the EC had a chairman whose interests were within the realm of energy activities.
Previously, an EC chairman was a former top executive of Tenaga Nasional Bhd (TNB) and at the same time, held a lot of TNB shares after resigning from the company and took up the EC job.
The sources said Rashdan was appointed due to his vast and hands-on experience in business and finance to lead the commission in supporting government agenda.
Additionally, the sources pointed out that within the chairmanship of various committees in the EC, Rashdan was involved in only one committee.
"Normally during a committee meeting, members of the commission will recuse themselves if the topic discussed falls within the interest of any member. Thus, the meeting will continue without the presence of the person with interest," one of them said.
On Gamuda's RE venture, the sources said it had menial involvement in the segment locally, adding that most of its RE exposure was in foreign markets especially Australia.
So far, Gamuda is acquiring a 30 per cent stake in ERS Energy Sdn Bhd, a company involved in solar energy.
Meanwhile, some economists said ethically, the appointment was uncalled for.
Malaysia University of Science and Technology economist Dr Geoffrey Williams pointed out that conflict of interest was a question of ethics, while the questions of what the act permitted was within the legal subject matter.
"They are not the same. What is legal is not always ethical and what is ethical is not always covered by the law or even allowed in law.
"We should never confuse law and ethics. If an appointment is seen as having a conflict, that is sufficient to harm stakeholder confidence and the integrity of the appointment," he said.
Putra Business School economic analyst Associate Prof Dr Ahmed Razman Abdul Latiff agreed that ethically, Rashdan should not accept the EC job unless he relinquished himself from the executive position at Gamuda.
"It will create negative perception among the industry players as he will be perceived to use his chairmanship in the commission for the benefits of his company. Level of trust among the players and investors will go down and this will not bode well for the country's aspiration in getting more investments coming," Ahmed Razman said.