This article first appeared in The Edge Malaysia Weekly on June 17, 2024 - June 23, 2024

TAN Sri Zainun Ali, former Federal Court judge and former chairman of Malaysia Airports Holdings Bhd (MAHB) (KL:AIRPORT), is tipped to replace Tan Sri Shahril Ridza Ridzuan as chairman of Axiata Group Bhd (KL:AXIATA) later this year. Shahril plans to step down after almost three years with the telecommunications group, according to sources.

Khazanah Nasional Bhd, the largest shareholder of Axiata, is looking to appoint Zainun as its additional nominee director on Axiata’s board as early as the end of this month, the sources say. Khazanah director of investments Ong King How is currently the sovereign wealth fund’s nominee director on the board.

Zainun will be appointed as a director of Axiata before filling the chairman’s position. Shahril’s current term ends on Dec 31, 2024, but he intends to retire earlier, sources say.

Khazanah declined to comment when contacted by The Edge.

In May, MAHB announced former Malaysian Aviation Commission executive chairman Dr Nungsari Ahmad Radhi as the new chairman of the airport operator, a position Zainun had served in for 15 months. The announcement came ahead of a proposal by a consortium comprising Khazanah, retirement fund the Employees Provident Fund (EPF), the Abu Dhabi Investment Authority and Global Infrastructure Partners to privatise MAHB at RM11 per share, in a deal valued at over RM12 billion.

Khazanah is the largest shareholder of Axiata, with a 36.72% stake as at end-March 2024, followed by Permodalan Nasional Bhd (PNB) (18.34%) and EPF (18.15%).

Shahril first joined the telecommunications group as an independent non-executive director in November 2021 and assumed the current role of non-executive chairman on Jan 1, 2022, after replacing Tan Sri Ghazzali Sheikh Abdul Khalid.

Shahril is also the chairman of state-owned private equity firm Ekuiti Nasional Bhd and Iskandar Waterfront Holdings Sdn Bhd, as well as a non-executive director of CGS International Securities Malaysia Sdn Bhd, Kuala Lumpur Kepong Bhd (KL:KLK), and Malaysia Airlines Bhd and its parent company Malaysia Aviation Group Bhd.

He has held various top positions in several organisations, including as the CEO of EPF from 2013 to 2018 and Khazanah managing director from August 2018 to August 2021. Prior to that, Shahril also served as managing director of Malaysian Resources Corp Bhd (KL:MRCB).

Shahril’s tenure as chairman saw Axiata completing the exercise to merge its local mobile unit Celcom Bhd with Digi dotCom Bhd in 2023. Currently pending is the proposed merger between Axiata’s Sri Lankan unit Dialog Axiata plc and rival telco Airtel Lanka. Dialog is acquiring Airtel Lanka from Bharti Airtel Ltd in exchange for 10.355% of the total issued shares in Dialog.

Apart from Malaysia and Sri Lanka, Axiata also operates mobile networks in Bangladesh (Robi), Indonesia (XL Axiata) and Cambodia (Smart). Furthermore, Axiata owns 63% in tower operator edotco Group Sdn Bhd, which manages a portfolio of 54,000 towers across nine markets — Malaysia, Indonesia, Bangladesh, Pakistan, Sri Lanka, Myanmar, Laos, Cambodia and the Philippines.

Last year, Axiata made its exit from the telecommunications tower business in Nepal at a loss after seven years, due to prolonged regulatory challenges and uncertainties related to its Nepal-based Ncell Axiata Ltd.

And there are plans to exit from the Myanmar market this year through the disposal of its entire stake in its subsidiary edotco Myanmar Ltd for US$150 million (RM706 million). edotco’s Myanmar exit is pending regulatory approval, which may come within six to 12 months, that is, September 2024 to March 2025, said AmInvestment Bank in a May 31 report.

The expected changing of the guard at Axiata also comes at a time when Axiata’s 78.12%-owned financial technology arm Boost has launched Boost Bank, after receiving the nod from Bank Negara Malaysia and the Ministry of Finance to commence operations as a digital bank from Jan 15.

AmInvestment Bank thinks prospects for Axiata, which posted a net loss of RM1.99 billion on revenue of RM9.75 billion for the financial year ended Dec 31, 2023 (FY2023), remain challenging in an elevated interest rate environment, coupled with strong US currency. Axiata Group has 64% exposure to unhedged foreign borrowings in the first quarter of FY2024, mainly from Axiata’s 30-year euro medium-term notes, edotco’s term loan, and US dollar-denominated debt owned by Dialog and Robi, the research firm said.

Coming from the aviation industry, which is highly regulated under national and international regulations, Zainun will have her work cut out for her at Axiata. She was the chief registrar of the Federal Court of Malaysia in November 1994 and made a judicial commissioner of the High Court of Malaya, Kuala Lumpur in August 1996. She served as High Court judge in Shah Alam, Johor and Kuala Lumpur from 1998 to 2001. In 2006, she was elevated to the Court of Appeal and served until 2012, when she was appointed a Federal Court judge in April that same year.

Zainun retired from the judiciary in October 2018. She is currently a pro-chancellor of Universiti Malaya and a member of the United Nations Global Judicial Integrity Network Advisory Board, Advisory Tribunal of the Islamic Development Bank of Jeddah, as well as a director of Allianz Malaysia Bhd and PNB.

Save by subscribing to us for your print and/or digital copy.

P/S: The Edge is also available on Apple's App Store and Android's Google Play.