Debate escalates over Malaysian airport privatisation involving BlackRock-owned entity

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24th May 2024 – (Kuala Lumpur) Malaysia’s government faces mounting pressure to reconsider its decision to involve a BlackRock-owned entity in the privatisation of the nation’s largest airport operator. Critics have raised concerns due to BlackRock’s financial ties to arms manufacturers that supply Israel, a nation currently engaged in a conflict in Gaza which has claimed nearly 36,000 lives, predominantly civilians, as reported by Gaza’s Hamas-run health authorities.

The consortium, which includes UK-based Global Infrastructure Partners (GIP) recently acquired by BlackRock, proposed a voluntary offer on 15th May to buy all shares of Malaysia Airports Holdings Berhad (MAHB). This move has sparked a backlash amidst Malaysia’s staunch support for Palestine, voiced vehemently by Prime Minister Anwar Ibrahim against Israel’s military actions and the U.S.’s support thereof.

Critics argue that the Malaysian administration has not effectively translated its vocal opposition into action. This sentiment was echoed by Chua Tian Chang from the Palestine Solidarity Secretariat during a protest in Kuala Lumpur, who highlighted the incongruity of transferring national assets to foreign companies linked to the Israeli military effort.

This controversy is further fueled by the active boycott against firms with ties to Israel and the U.S., impacting American franchises like McDonald’s, KFC, and Starbucks in Malaysia. The recent participation of U.S. arms manufacturer Lockheed Martin at a Kuala Lumpur defence fair added to the public outrage, given BlackRock’s significant investment in the company.

Despite earlier government denials of a potential sale to GIP, the Gateway Development Alliance consortium recently disclosed plans to increase the Malaysian sovereign wealth fund Khazanah Nasional and national private retirement fund EPF’s collective stake in MAHB to 70%. The remaining 30% would be held by the Abu Dhabi Investment Authority and GIP.

The proposed acquisition, valued at 18.4 billion ringgit (approximately US$3.9 billion), has the Transport Ministry’s approval but continues to face criticism for potentially compromising Malaysia’s international stance and principles.