Call on Abdullah to act as a leader for all Malaysians and not just Malays to tell Umno General Assembly next week that the NEP must be reviewed and even scrapped as bumiputera corporate equity  ownership had reached 36.64 per cent as revealed in Parliament on Tuesday

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Media Statement
by Lim Kit Siang  
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(Parliament, Thursday) :  The Prime Minister, Datuk Seri Abdullah Ahmad Badawi should act as a leader for all Malaysians and not just the Malays and should tell Umno General Assembly next week that the New Economic :Policy (NEP) should be reviewed and even scrapped as bumiputera corporate  equity  ownership had reached 36.64 per cent as revealed in Parliament on Tuesday.

Deputy Finance Minister, Datuk Dr. Awang Adek had told Parliament on Tuesday during question time  that bumiputeras own 36.6% of equity ownership at Bursa Saham  valued at RM78.4 billion as at Dec 31 last year, as compared to 46.9 per cent or RM100.4 billion for non- bumiputeras and 16.45% or RM35.2 billion for foreigners.

As these figures are  based on par value, the percentage of  bumiputera corporate equity ownership would be very much higher if based on market value.

During the debate on the Prime Minister’s Department on Monday, I had spoken at length on the flaws of the Economic Planning Unit (EPU) methodology, giving ten illustrations  on why the EPU methodology could be incorrect and  misleading, giving a false picture of ethnic corporate equity, the corporate sector and the national economy.

I had expected the Minister who has direct charge of EPU, Senator Datuk Seri Effendi Norwawi to come personally to Parliament to give a point-by-point rebuttal to my speech and  the 10 illustrations highlighting the six major flaws of the EPU methodology, but instead, he despatched his deputy minister, Senator Datuk Abdul Rahman Suliman who, when pressed, said he would give me a written reply to the examples I had given.

May be Effendi is embarrassed to come, because he is not only Umnoputra but NEPputra par excellence, who had benefited enormously from the NEP as compared to the overwhelming majority of the Malays – as illustrated by news report last month of his RM50 million divorce settlement with his former wife Zariah Hashim @ alias Farida Effendi.  What percentage of Malays after 36 years of NEP could afford not 10 per cent, but one per cent, of Effendi’s  RM50 million divorce settlement?

I am still waiting for the detailed reply promised by Abdul Rahman and I call on Effendi to ensure that such a response is given by Monday under his name.

Abdul Rahman had  dismissed the University Malaya research study entitled “Bumiputeras in the Corporate Sector – Three decades of performance 1970-2000”, by Dr. M. Fazilah Abdul Samad, head of department of finance and banking in the Faculty of Business and Accountancy, which was completed in 2002  which found that the 30 percent bumiputera equity ownership as targeted under the government’s NEP had already been achieved about a decade ago when it hit 33.7 percent in 1997.

Abdul Rahman argued the methodology used in the Fazilah study  only covered public listed companies on the Kuala Lumpur Stock Exchange, now called Bursa Malaysia and did not differentiate between the bumiputera ownership and government-owned shares, and that the  definition of bumiputera equity include agencies which the government has interests.

Abdul Rahman is wrong and clearly he has not read or understood the Fazilah report.    Fazilah’s research -   a 10-year analysis of bumiputera equity ownership between 1988 and 1997 of public listed companies on the KLSE based on the par value of the shares – used  calculations which showed the bumiputera equity ownership hitting 33.7 percent in 1997. It did not include government-linked companies as claimed by Abdul Rahman. Fazilah had put the government-held ownership at 9.5 percent in 1997 under another category.   It also did not include

nominee company ownership which many economists have argued would be held in the majority on behalf of bumiputeras.

In any event, why is Abdul Rahman rubbishing the Fazilah report that bumiputeras had reached 33.7% of equity ownership  in 1997 when Awang Adek has admitted that as at the end of last year, bumiputra equity ownership had reached 36.6%?
 

(09/11/2006)