Lim offers to testify in court on Bumiputera equity requirement

The ‘unconstitutional’ act forcing this equity ruling only on locally-owned IILS but not foreign-owned IILS approved in 2015


FORMER Finance Minister Lim Guan Eng (picture) said he is willing to testify in court over the issue of the government’s requirement for local freight forwarding companies to have 51% Bumiputera equity, describing it as “unconstitutional”.

He said when he was the minister between May 2018 to February 2020, the Royal Customs Department had issued a letter stating that existing freight forwarder companies were exempted from complying with the 51% equity requirement.

Lim added that in the said letter issued on Oct 24, 2018, the Customs Department disclosed that the Ministry of Finance had agreed that freight forwarders who were issued licenses before 1990 did not have to lose control of their companies and dispose of their shares to comply with the 51% Bumi equity ruling.

“Any attempt by the government to overturn the decision on Oct 24, 2018, can be challenged to court and I am willing to come forward as a witness to confirm this,” Lim said in a statement yesterday.

Lim accused the ruling was reversed under the current government, saying that this matter is also confirmed by current Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz in the Parliament.

“The Customs Department’s letter on Oct 24, 2018, had clarified the issue that there was no need to comply with this requirement,” added Lim.

“First, it is unfair to withhold any renewal of licenses of freight forwarders for not complying with the 51% Bumi equity after they have been operating their business for decades to just suddenly surrender control of their companies,” he said.

Lim further said there are double standards in forcing this equity ruling only on locally-owned International Integrated Logistics Services (IILS) but not foreign-owned IILS approved in 2015.

“Where then is the Keluarga Malaysia concept of Prime Minister (Datuk Seri) Ismail Sabri Yaakob, when foreigners are better taken care of than Malaysians? Giving special privileges to foreigners at the expenses of locals is clearly contrary to the Federal Constitution.

Lim added that the government should not take this divisive step of protecting foreign-owned IILS but stripping away control of non-Bumi Malaysian-owned IILS, which had operated for decades merely to further their political objectives to be champions of the Bumi agenda.

“How many poor Bumiputeras will benefit?,” he said.

Last month, Tengku Zafrul said the government will further examine Bumiputera 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.

Prior to this, Parti Warisan president Datuk Seri Mohd Shafie Apdal said 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.

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.

Although Warisan remains supportive in bridging the socio-economic gap between the Bumi and non-Bumi 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.