BlackRock, the bedrock for international asset management, involving Malaysian economy as well
SHAH ALAM - BlackRock is one of the world's leading providers of investment, advisory and risk management solutions.
The New York City-based investment firm with alleged links to Israel was recently allowed to own shares in Malaysia Airports Holdings Bhd (MAHB).
Critics have opposed the decision on BlackRock's involvement in the MAHB privatisation through the Global Infrastructure Partners (GIP).
According to a report by online news portal Free Malaysia Today, BlackRock was in the process of acquiring GIP in a multi-billion dollar deal struck early this year.
This was aimed at making MAHB a globally competitive entity.
Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz has defended BlackRock’s investment in MAHB, urging Malaysians to consider the issue holistically.
Meanwhile, Prime Minister Datuk Seri Anwar Ibrahim on May 17, claimed that the allegation that 25 per cent of MAHB would be owned by a "pro-Zionist" company was baseless.
Who is BlackRock?
The company was founded in 1988 and now has over 98 companies in 38 countries. It is now a leading global investment firm that accumulated $10 trillion in assets under management (AUM) last year.
These assets spanned a wide range, including shares in major publicly traded companies, individual homes and vital infrastructure such as pipelines.
What it does
The company's top holdings include Microsoft, Apple, Nvidia, Amazon, Tesla and Meta Platforms, where the firm profited tremendously from investment and advisory fees.
Besides these familiar tech giant companies, it also played a big part in funding companies like Lockheed Martin, RTX, Northrop Grumman, Boeing and General Dynamics, all of which helped manufacture weapons.
A famous allegation stated that these defence companies distribute all the weapons needed in Israel for their military system.
Because of this, its deal with Malaysia to help the country's economy through GIP sparked controversy and disagreements from the public, especially activist organisations such as pro-Palestinian non-governmental organisation (NGO) Boycott, Divestment and Sanctions Malaysia (BDS Malaysia) and the Malaysia Consultative Council of Islamic Organisation (Mapim).
Its relevance in Malaysia
BlackRock has been active in Malaysia for some time, investing in various finance companies.
Since 2021, it has funded the MSCI Malaysia private equity fund and the Employees Provident Fund's (EPF) syariah private equity SMA fund.
This funding, typically amounting to millions of US dollars, was set to continue until next year but may be extended for another seven years with EPF's approval.
Criticisms were currently being thrown at the Malaysian government's decision to let a "genocide-tainted" company manage local airports.
The government is currently considering a consortium including Khazanah Nasional Berhad and the EPF to allow BlackRock to be MAHB's shareholder, apart from the company's privatisation plan by GIP, while becoming one of its shareholders too.
As a result, the government-linked Khazanah and EPF would own 70 per cent of the stake in MAHB, where Khazanah's stake will go from 33.2 per cent to 40 per cent and EPF's from 7.9 per cent to 30 per cent.
The remaining 30 per cent will be represented by GIP and the Abu Dhabi Investment Authority (Adia).
Criticism towards recent deal
There have been demands through criticisms tossed to the government, specifically Anwar who is also Finance Minister to clarify in detail the deal because it involved BlackRock's controversial pro-Zionist status.
They were particularly pushing the government to drop the agreement, which came from not just organisations such as BDS Malaysia but also politicians such as Wan Ahmad Fayhsal Wan Ahmad, who said that the protest would not only come from the opposition side, being Perikatan Nasional's member but also from the whole Malaysian society.
BDS wrote in a letter that BlackRock's involvement will become "entry into the management and ownership of 39 airports in Malaysia" which will give Malaysia strategic assets from a company complicit in genocide and therefore needed to be stopped before it becomes worse.
Some academicians also realised the fault in the steps taken by the Malaysian government to deal with BlackRock, such as Japanese scholar Saul Takahashi as reported in online news portal Malaysia Now for Anwar to cancel the plan.
Worsening controversy
Other politicians, including Transport Minister Anthony Loke and Zafrul also refuted the opposition's and public's claims, with the former claiming that Fayhsal "knocked on the wrong door" and should have referred to Khazanah if he wanted to stop the activity.
At the same time, the latter was reported saying that BlackRock was a listed company that Israelis did not own and that if people were serious about boycotting, they would also boycott using iPhones since Apple's huge shareholder was also BlackRock, which was not seen today.
The government has yet to announce whether they will re-clarify their stance on taking in BlackRock as a part of the Malaysian economy's shareholders.
