Freight forwarders: Is it fair to give up 51% of a company?

By ZAIDI ISHAM ISMAIL
editor@dagangnews.com

KUALA LUMPUR Oct 15 - Business people would give their all in their entire lives to set up their businesses. Most would have sacrificed their blood, sweat and tears before they can start to enjoy the fruits of their labour.

But would a business entity feel fair when they are forced to give up 51% of their ownership to the Bumiputera?

This is exactly what's happening right now in some segments of the Malaysian business landscape.

The kickoff has already started, of which the freight forwarders have until end of the year to "let go" of half their ownership.

This policy was derived in 1971 and it is called the New Economic Policy, aimed at equally distributing the country's wealth among all the races.

To date, some 17% of Bumiputera in the country have a stake in some form of the country's economic pie.

This could be in shares, property, business ownership and savings.

However to be fair to the government, it is understandable why the government had to resort to this measure.

The Bumiputera's participation in economic activities is far lagging and one race cannot flaunt their wealth over the other especially in a multi-racially sensitive Malaysia.

That is why the leaders introduced the NEP.

But at the same time, is this policy even fair?

Tan Sri Ramon Navaratnam said with the policy in place, there is a danger that companies would pack up their bags and leave.

"The companies which are mostly owned by non-Bumiputera should discuss with the government on how to resolve this.

There has been no meeting between the two parties when all of a sudden the equity requirement was raised to 51% from 30%. Why the rush," Navaratnam told DagangNews.com.

The Asia Strategic Leadership Institute chairman said rather than give up equity, it would be better to train the young graduates who can learn to become better entrepreneurs.

"Besides, if the non-Bumiputera own the company, do they have the experience to manage it," said Navaratnam.

For now, the equity liberalisation starts with the  freight forwarding sector and subsequently it will be imposed on other sectors.

Where does the buck end?

Navaratnam added at this rate, there is a possibility that businesses will be disillusioned and leave Malaysia.

A source at the International Trade and Industry Malaysia said this ruling only distorts the business landscape as investors just want a level playing field.

"Unjust ruling such as this will only scare investors away and discourage them from setting up operations here," said the official.

Muar Member of Parliament Syed Saddiq Syed Abdul Rahman reportedly said the intention is noble but how do we ensure that the rightful person acquire the equity.

"The fisherman and kampung folk must gain from the Bumiputera equity dispersal.

''Not the government-linked companies and their cronies," said the MP.

Perhaps the government should go back to the drawing board and find ways on how this policy can really benefit both the Bumiputera and non-Bumi. - DagangNews.com