Govt to examine Bumiputera equity stake in logistics, says finance minister

pic by MUHD AMIN NAHARUL

THE government will further examine Bumiputera participation in the logistics industry amid calls to review the equity policy.

Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz said in finding a longterm solution to this matter, the government has entrusted the Bumiputera Agenda Steering Unit (Teraju) to examine the matter.

The minister was responding to Seremban MP Anthony Loke Siew Fook’s question on whether the government is ready to review the equity policy for freight forwarding companies as the existing equity conditions are difficult to implement during the Minister’s Question Time in Dewan Rakyat yesterday.

Tengku Zafrul said the issue is not new and any decision made by the Finance Ministry (MoF) should take into account the views of all stakeholders.

The current conditions for Bumiputera equity participation of 51% were agreed by the Bumiputera Economic Council in 2015 which was chaired by then Prime Minister (PM) Datuk Seri Mohd Najib Razak. In the same year, the Federation of Malaysian Freight Forwarders applied for an exemption to this condition.

In 2016, MoF issued that local companies that have obtained International Integrated Logistics Services (IILS) status are exempted from this requirement until Dec 31, 2020.

In December 2020, MoF announced that the period to meet this Bumiputra participation condition was extended until Dec 31, 2021.

At the same time, this condition is exempted for IILS-rated customs shipping agents with majority foreign ownership and companies that are listed on Bursa Malaysia.

“Recently, MoF has extended this exemption period for the second time until December 2022, so that Teraju can examine Bumiputra participation in the logistics industry further.

“The results of this study will then be presented to the Cabinet to chart the direction of Bumiputra involvement in the logistics sector and ensure that the industry continues to grow. This is primarily in terms of improving industry efficiency, increasing productivity and maintaining a low-cost base,” Tengku Zafrul said.

In addition, this effort will ensure that Malaysia’s position as the 13th most efficient port system in the world based on the Port Performance Index published by the World Bank can be improved, he added.

Loke debated that the logistics sector was already liberalised during the Najib administration whereby IILS companies with foreign equity up to 100% were exempted from the 51% Bumiputra equity policy, but this condition was imposed on local companies with IILS status.

He added that on paper, although most of the companies established after 1990 were Bumiputra-owned with 51%, it is common knowledge that most of these companies have non-Bumiputra ownership behind the scenes.

“A study needs to be done so that it is fair to all parties and non-Bumiputras can also own these logistics companies.

“If the policy is inconsistent and unfair to non-Bumiputra companies, it is not in line with the spirit of Keluarga Malaysia brought by the PM,” said Loke.

Tengku Zafrul responded that as presented by the PM in the 12th Malaysia Plan recently, Bumiputra corporate equity holding is only 17.2% after more than 30 years of the New Economic Policy.

“So, the proposal to introduce an equity safety net framework and establish a Bumiputra prosperity division that will coordinate all related initiatives is most welcome,” he said.