Unfair to impose 51% Bumiputra equity to local firms, says Shafie

Govt is urged to review the policy carefully to see whether Bumiputra players are ready to take up equity in the companies

by AZREEN HANI / pic by HUSSEIN SHAHARUDDIN

IT IS unfair for the government to impose the 51% Bumiputera equity condition in the freight forwarding business as the industry is liberalised under the free trade agreement, says Parti Warisan president Datuk Seri Shafie Apdal (picture).

Shafie urged the government to review the policy carefully to see whether Bumiputra players are ready to take up equity in the companies.

“We fear that most companies in the freight industry might not be able to survive as there are too few eligible Bumiputras to take over equities in such companies because they are still recovering from the Covid-19 pandemic,” he said in a statement yesterday.

Although Warisan remains supportive in bridging the socio-economic gap between the Bumis and non-Bumis in the country, Shafie said, it should also be done fairly.

He also said the requirement does not apply to foreign firms, which may cause the local players to sell off their ownership to foreigners, or completely shut their businesses.

“Firstly, it is a form of discrimination against local industry players. The designated 51% Bumiputera equity does not apply to the international or foreign companies,” he added.

“The industry was liberalised under most Free Trade Agreements (FTAs).

“Any requirement that curbs foreign companies in the liberalised industry could be considered a violation of the FTA.

“It is, therefore, not fair for the government to enforce the equity rule to the industries’ local players,” he said.

Warisan is of the opinion that the government should repeal the equity stake requirement altogether.

“If the government has decided to liberalise the industry and it is open to international companies without any other conditions, the same principles should be applied to local players as well.”

On Tuesday, Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz said the government will further examine Bumiputra participation in the logistics industry amid calls to review the equity policy.

He said in finding a long term solution to this matter, the government has entrusted the Bumiputra Agenda Steering Unit (Teraju) to examine the matter.

“Recently, Ministry of Finance 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 Dewan Rakyat.

Last week, the Federation of Malaysian Freight Forwarders proposed that the requirement — possibly calling for a 51% Bumiputra ownership of their companies — be deferred to the end of next year.

The federation’s president Alvin Chua reportedly said former Prime Minister Najib Razak had announced a revision of Bumiputra equity requirements in 2018 and said it would be reviewed again at the end of 2020.