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Understanding the network typology of the seven government-linked investment companies (GLICs)

Jean-Marc Roda (), Edmund Terence Gomez and Norfaryanti Kamaruddin

Chapter 4.1 in Minister of Finance Incorporated: Ownership and Control of Corporate Malaysia, 2017, vol. 1, pp 177-181 from CIRAD, Forest department, UPR40

Abstract: This is a study of Malaysia’s new political economy, with a focus on ownership and control of the corporate sector. The method of Roda et al. (2015) is applied here to analyse Malaysia's corporate sector, with specific focus on the GLICs and the publicly listed GLCs they own and control. This method is sensitive to the selection threshold of shareholding links: when selecting companies linked by at least 10% ownership (and above), the results are critically biased. This is because ofthe existence of feedback loops of control through interlaced cross-shareholdings. These cross-shareholding structures allow companies to legally increase their control while displaying low percentages of direct ownership. However, by selecting all companies of a given database or the firms linked by at least 1% ownership, this would give the same rankings for the top five controlling entities in Malaysia. We find that a core of 26 corporations controls 54% of the power over the Malaysian corporate sector.

Date: 2017
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