What is the real agenda of MoF and MITI by enforcing the 51% Bumiputera equity in forwarding & logistics companies for Customs license approval ?
The only options the Non Bumi busines owners have is either to appoint a Bumi partner who is going to take over the company ( 51% ) that was built through hardship and struggles over the years or to close business because they cannot obtain/renew license.
Are you trying to wipe out Non Bumi business owners in this industry by next 5 years ? What are the other industries you are aiming at?
If you want to statistically increased Bumi business owners , mould them and give them more incentives and opportunities ( as though whatever that is being allocated is not enough ) and not by killing or stealing the Non Bumis hardship. This is not how you grow.
Almost zero proposals can succeed in government approval without Bumi Holding in the company , the first question ask is – Is It A Bumi Company ? Why ? Isnt there are other criteria you would like to check other than race? Arent Non Bumis Malaysians enough to qualify for tenders , projects , contract and licenses ?
In January 2021 , MOF issued a letter to state that all custom licenses must comply with Bumiputera equity requirement , but no percentage of Bumiputera equity requirement was specified.
Logistics companies have slowly built up their business over a lengthy period as compared to other industries as the industry fragmented and highly competitive. The sudden decision by MOF in 2021 for all customs licenses to comply with Bumiputera equity requirement ( 51% ) would pose immense difficulties to the logistic companies.
It appears that company would have no choice but would be compelled 51% equity to the Bumiputera investors.
The questions is , within this short timeframe frame and difficualt prevaling economic conditions , would there be Bumiputera investors wanting to buy over 51% equity ?
And , if present logistic companies are compelled to sell a majority share to Bumiputera investors , it would mean that the government is telling us to sell our business to Bumiputera or close down our business.
Selling 51% also would mean the present owner can no longer control or run his business.
If we can’t find Bumiputera to actually invest in the companies before the deadline of 31/12/2021 , it means that all the logistic companies with custom licenses would could down.
Shafie urges Putrajaya to scrap 51pc-Bumi ownership rule in freight forwarding companies
PETALING JAYA: Warisan has urged the government to scrap the 51% Bumiputera ownership requirement for freight forwarding companies.
Its president Shafie Apdal said it was a form of discrimination to local players in the logistics industry.
“This is because the requirement for the 51% Bumiputera equity is not applicable to international or foreign companies,” he said in a statement here today.
He said foreign companies cannot be subject to the rule because the industry had been liberalised under most free trade agreements (FTAs).
“As such, any condition that oppresses foreign companies can be considered a violation of the FTAs.
“It is not fair then for the government to instead enforce the equity rule to local industry players.
“Warisan is of the opinion that if the government decided to liberalise the industry and is open to any international companies without any conditions, the same principle should apply to local industry players.”
Shafie said the government should study in detail the policy’s implementation, particularly the readiness by bumiputera players to buy equities in the companies concerned.
He was worried that without a careful review, most companies would not last and would fold.
“This is more concerning if the percentage of bumiputera buyers who are qualified and able to take over the equities is low, particularly when the country is faced with the Covid-19 pandemic.
“If this happens, there’s a big possibility that local industry players might have to sell their companies to foreign ones.
“This is a detrimental move as it will widen the gap of equity ownership between local and international companies.”
Shafie said that according to data by the Economic Planning Unit, the equity ownership among foreigners has risen from 37.2% in 2011 to 45.3% in 2015.
In the same period, equity held by non-bumiputeras has dropped from 34.8% to 30.7%, he said, adding that bumiputera equity ownership has also fallen from 23.4% to 16.2%.
“As such, Warisan rejects any form of discrimination against local companies, whether bumiputera or not, which will only benefit foreign companies.
“The government should prioritise companies within the country so they can compete with international ones,” he said.
Shafie said that although Warisan believed affirmative action was needed to close the socio-economic gap between the races in Malaysia, it should also be done fairly.
“It should not be implemented just to give an advantage to foreign industries or the bumiputera elites alone,” he said.
Saddiq questions why M’sian equity holders punished for not being born Malay
Muar MP Syed Saddiq Syed Abdul Rahman today questioned the government’s plan to increase the Bumiputera stake in freight forwarding companies to 51 per cent under the 12th Malaysia Plan.
The Opposition lawmaker expressed scepticism that raising the percentage would effectively translate to widening business ownership within the Bumiputera community.
Instead, he suggested that the move may benefit only the elite few rather than enrich the community at the expense of the other minority ethnic groups.
“The reality is when we look at it, it is populist but it’s not at all helping the poor Malays and it’s almost similar to the policies introduced in 2016,” he said in the Dewan Rakyat while debating the 12MP tabled by Prime Minister Datuk Seri Ismail Sabri Yaakob yesterday.
He pointed to past efforts to bolster Malay ownership in the tech retail sector under the Barisan Nasional government and named the introduction of the Mara digital malls to counter the establishment of Low Yat — a tech mall in the city centre that was perceived to be controlled by a particular racial community.
“But look at its impact today. Many Mara Digital Malls have stuttered, companies have shuttered. Who is now left in the lurch? Mara. When the money could have been allocated to help poor Malay youths by giving them scholarships to go abroad and then return to serve the nation,” he said.
Syed Saddiq was also alarmed at the policy of mandating the sale of assets belonging to government-linked companies (GLCs) and government-linked investment companies (GLICs) only to Bumiputeras.
He asked the government to explain how the policy uplifts small businesses, farmers and fishermen.
“So, if this policy is continued, who is going to benefit? Cronies, family members or the rakyat who are suffering badly? This is such an unfair policy,” he said.
The former youth and sports minister asked the government if such a policy were fair to non-Bumiputera citizens.
“This is because this pro-Bumiputera policy exemption is given to foreign companies,” he pointed out.
He noted that PM Ismail Sabri acknowledged that non-Malaysians held a 45.5 per cent equity in Malaysian businesses.
“We are prioritising foreigners than our very own Malaysians just because they are not born into the Malay race and the Muslim faith,” he said in Parliament.
He urged the government to focus on capacity building as the best way forward.
“I hope that the Opposition leader can urge the government. Do not find this coward’s way out as it hurts Malaysians and the development of Malaysia as a whole,” he added.
Earlier during the Minister’s Question Time (MQT), Finance Minister Datuk Seri Tengku Zafrul Abdul Aziz announced that the Finance Ministry (MOF) has recently extended for the second time, the exemption period for freight forwarders to meet the requirement of 51 per cent Bumiputera equity participation, until December 2022.
He explained that this was to allow the Bumiputera Agenda Steering Unit (Teraju) to assess in-depth the participation of the Bumiputera community members in the logistics industry, with other stakeholders.
Tengku Zafrul said that the findings of the study would be tabled to the Cabinet to determine the direction of Bumiputera participation in the logistics sector, to enable the industry’s continued growth.
He was responding to former transport minister and Seremban MP Anthony Loke, who asked if the government is prepared to review the said policy, as the existing regulations are difficult to implement.