KUALA LUMPUR: Khazanah Nasional Bhd has affirmed its commitment to ensuring transparency, accountability and good corporate governance of its special purpose vehicle, i2M Ventures Sdn Bhd.

The sovereign wealth fund owned by Minister of Finance (Incorporated) said this after the Auditor General report revealed that i2M has unstable financial position and failed to achieve the established objectives of promoting, marketing and managing businesses in Iskandar Puteri, Johor.

The report said i2M incurred losses of RM135.46 million in 2022 but was still able to cover its obligations given that it was directly funded by Khazanah, in line with the purpose of its establishment as a non-profit entity.

The report also recommended a review to ensure i2M's existence is relevant after it fulfills all commitments and agreements with Iskandar Global Business Services (GBS Iskandar) investors in 2025.

The report also highlighted that i2M should strengthen its corporate governance practice particularly in providing standard operating procedure (SOP) for incentive payment to investors.

Khazanah said it acknowledges the four recommendations from the National Audit Department regarding i2M's corporate governance.

It explained that i2M is no longer disbursing new grants, and the existing recipients are being administered by Iskandar Investment Bhd  (IIB) under the service level agreement signed in May 2020. 

"Therefore, board meetings at i2M were conducted via circular resolution. All matters of proper governance and oversight are undertaken by IIB as per the terms of the agreement," Khazanah told Business Times in an email.

It added that a revised SOP had been adopted on June 28 last year to address the delay in disbursing incentives, which happened due to incomplete documentation from grant applicants.

Khazanah said the strategic plan for i2M will align with IIB's business plan to develop the ecosystem in Iskandar Puteri given that it is now assuming i2M operations.

"Khazanah Nasional via IIB will always ensure proper governance and prudent financial practice in disbursing the remaining grants to the recipients. 

"Khazanah Nasional is also committed to ensuring transparency, accountability and good corporate governance, guided by our Framework of Integrity, Governance and Risk Management (FIGR) as we align with our national development objectives," it said.

https://www.nst.com.my/business/corporate/2024/07/1072532/khazanah-nasionals-response-auditor-general-report-its-spv