Yahoo Finance Hamas-Backing Anwar Defends BlackRock in Face of Israel Protests
(Bloomberg) -- Malaysian Prime Minister Anwar Ibrahim has been a fierce critic of Israel over its war against Hamas. Now he’s resisting pressure from his own critics to nix a multi-billion dollar Malaysian airports privatization deal involving BlackRock Inc. over its ties to Israel.
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Anwar told parliament this week that it was “not realistic” to cut ties with any company for links to Israel. Then he sought to reassure US investors that his government had no issue with BlackRock, which bought Global Infrastructure Partners — a member of the consortium taking over Malaysia Airports Holdings Bhd — for 12.3 billion ringgit ($2.6 billion).
“The collaboration between Malaysia Airports and GIP for us is critical,” he said at a luncheon hosted by the American Malaysian Chamber of Commerce on Tuesday. “We made it clear to all members of parliament and it explains our position on investments from overseas, including the US.”
The furore tests the limits of Anwar’s support for Palestinians and Hamas, which is designated a terrorist organization by the US and European Union, as he looks to shore up support at home and also court global investors. Malaysia doesn’t have trade or diplomatic ties with Israel.
“A lot of political capital has been spent to defend the deal,”said Adib Zalkapli, a political analyst tracking Malaysia for over a decade. “There will be serious consequences to Malaysia’s reputation should the government decide to cancel the deal.”
The privatization deal, announced May 15, valued the airport operator at about $3.9 billion and keeps 70% of the company in Malaysian hands, namely sovereign wealth fund Khazanah Nasional Bhd and the Employees Provident Fund. Abu Dhabi Investment Authority and GIP will control the rest.
The view from Anwar’s advisers is that his government cannot afford to be selective in how it treats companies regarding Palestinian issues as there are other major investors in Malaysia such as the Vanguard Group that also have substantial investments in Israel, according to people familiar with the matter.
GIP has been treading carefully. It told Malaysian state media that BlackRock would not be involved in privatizing Malaysia Airports and GIP’s existing leadership team would “retain full control.”
BlackRock is among the biggest investors in some of Malaysia’s largest companies, with total holdings worth nearly $5.8 billion in equities and government bonds, according to data compiled by Bloomberg.
Rozaid Rahman, a media and strategic communications director at the Prime Minister’s Office, referred to comments Anwar made in parliament this week on the privatization deal. Khazanah and BlackRock did not respond to Bloomberg requests for comment.
Boycotts
The campaign against BlackRock first emerged from the Boycott, Divestment and Sanctions movement against Israel, which came to the fore in the US this year with students pushing elite universities to cut their investments in anything tied to Israel and the weapons that fuel the war in Gaza.
While university administrators, donors and lawmakers in America have rejected the BDS movement for decades, it has found fertile ground in Malaysia where there is a strong anti-Israel sentiment in the Muslim-majority country. Boycotts of global brands such as Starbucks, KFC and Pizza Hut for perceived links to Israel have hurt local franchises in Malaysia and jobs.
“Any company with strong ties with Israel is a potential target of our campaigns,” said Nazari Ismail, chairman of the Malaysian chapter of BDS. But when it came to BlackRock, it would be impossible to stop it from buying Malaysian shares in the open market, he added.
The protest against the deal has also found traction in the Malay-Muslim opposition ahead of a local election on July 6 with politicians describing Anwar as “America’s adopted child.” A minister was reported as saying that the deal was not unanimously endorsed by Anwar’s cabinet, signaling some unease within his coalition.
At the AmCham Malaysia luncheon, Anwar pushed the view that the deal had been politicized. The BlackRock issue “is rancorous at the local level, at the by-election with people casting aspersions and allegations,” he said.
--With assistance from Kok Leong Chan.
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