ONE of the main reasons why local companies do not grow is because they are subject to unfair advantage, in comparison to foreign companies.
It appears that foreign companies have more leeway on the country, since they are exempt from the Bumiputera equity requirement.
The thing is, local companies should not be subject to unnecessary regulations either.
Take the case of the Malaysian freight forwarders, for example.
They are in a quandary on whether the Finance Ministry (MOF) is going ahead with the plan to impose 51% requirement for freight forwarders to obtain customs licenses.
It was established in 2018 that the approval for customs licenses were subject to the following renewal requirements.
Custom licenses registered before 1976 were not subject to the Bumiputera equity policy. However, customs licenses registered after 1976 and before 1990 were subject to the 30% Bumiputra equity.
And custom licenses registered after 1990 had to give 51% Bumiputra equity!
In January, the MOF announced that all applications for customs licenses must meet the Bumiputra equity requirement, although the actual percentage was not stated.
Freight forwarders are not sure whether the MOF is sticking to the announcement made in 2018 or whether all local freight forwarders have to comply with the 51% Bumiputra ruling.
Since there are no specific details from the MOF, freight forwarders are worried about their future. The dateline for the freight forwarders is fast approaching; that is, by the end of this year.
The Government must come to their senses. Our freight forwarders, like many other companies, have been hit hard by the pandemic.
Racist and unjust
To maintain the 51% Bumiputra equity during these unprecedented times would cause untold damage and devastate more than one thousand local freight forwarders.
The strange thing about the customs requirements imposed by the MOF is the fact that foreign companies are exempted from the Bumiputra equity requirement.
I am not sure why foreign companies are given preferential treatment compared to locals. In my view, no Government in its right mind would want to promote foreign companies at the expense of local ones.
It is indeed shameful that the Government would want to go to the extent of jeopardising local companies, by imposing the 51% Bumiputra equity.
Local companies that have been established over the years through hard work are now suddenly told to give up their majority share to local Bumiputra companies or sell their companies outright.
This is not even the requirement of the New Economic Policy (NEP), but an overt and dastardly nature of the “Never Ending Policy”.
If the 51% Bumiputra policy is implemented, then it would be interesting to speculate as to who will be the direct beneficiaries of this racist and myopic policy. – Sept 23, 2021
Ramasamy Palanisamy is the state assemblyperson for Perai. He is also Deputy Chief Minister II of Penang.
The views expressed are solely of the author and do not necessarily reflect those of Focus Malaysia.
