funds@ (Adds meeting with ratings agencies)
KUALA LUMPUR, May 14 (Reuters) - Malaysian Prime Minister Mahathir Mohamad's new government will review political representation in the country's largest government-linked investment firms, including the main sovereign and state pension funds, the funds have said.
A joint statement from six funds said Mahathir's government, which took power after last week's general election, had emphasized the importance of "separation between professional management of the institutions and any undue interference from political or any other external parties."
Malaysia's biggest funds are headed by executives mostly appointed during the nearly decade-long tenure of ousted Prime Minister Najib Razak. It was not immediately clear if any of them would be affected by the review.
The funds include sovereign fund Khazanah, pension fund Employees Provident Fund (EPF), investment fund Permodalan Nasional Berhad (PNB), retirement fund Kumpulan Wang Persaraan (KWAP), military retirement fund Lembaga Tabung Angkatan Tentera (LTAT) and Lembaga Tabung Haji (LTH), a fund for the pilgrimage to Mecca.
These funds control billions of dollars in assets, including significant shareholdings in some of the country's biggest publicly traded companies, including banks.
On Saturday, Mahathir appointed a special team - a 'Council of Eminent Persons' - to advise the government on economic and financial matters for the next 100 days. Former central bank governor Zeti Akhthar Aziz, billionaire tycoon Robert Kuok, among others, were named to the team that is headed by former finance minister Daim Zainuddin.
"For funds that had political representation on their respective board of directors, Daim reaffirmed that this will be reviewed and changed, as required," the funds said in the statement, issued after meeting Daim on Sunday.
On Monday, Daim met the heads of the national stock exchange, the securities regulator and the central bank for a briefing on the stock and currency markets, while Zeti met ratings agencies to brief them on new economic policies, a source familiar with the discussions said.
Mahathir's alliance has promised to cancel an unpopular goods and services tax (GST), reintroduce fuel subsidies and review Chinese investment deals, raising concerns over the country's fiscal strength.
The ratings agencies wanted to know more about the government's plans to cancel GST, how it would deal with the revenue shortfall, and its plan to review projects signed off by the prior government, the source said.
Earlier on Monday, ratings agency Moody's said if the new government fulfilled its campaign promises without any adjustments, it would be credit negative for the economy, adding that there was "little clarity" on the new government's economic policy agenda. (Reporting by Liz Lee and A. Ananthalakshmi; Editing by Raju Gopalakrishnan)