When I was Finance 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% bumi equity requirement. In the said letter issued on 24 October 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 off their shares to comply with the 51% bumi equity ruling.
Unfortunately, this ruling appeared to be reversed by the current government who is attempting to forcibly compel freight forwarders that had been operating before 1990, to comply with the 51% bumi equity ruling. Freight forwarders formed after 1990, were required to have 51% bumi equity for issuance and renewal of licenses.
Finance minister Tengku Zafrul Aziz had confirmed in Parliament that the requirement for existing freight forwarding companies and locally-owned International Integrated Logistic Services(IILS) to forcibly sell off their shares to increase the equity ownership to 51% bumi, was not issued in 2018 but by this current government. The Customs Department letter on 24 October 2018 had clarified the issue that there was no need to comply with this requirement.
Any attempt by the government to overturn the decision on 24 October 2018 can be challenged to court and I am willing to come forward as a witness to confirm this. 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.
Second, there are double-standards in forcing this 51% bumi equity ruling only on locally-owned IILS, but not foreign-owned IILS approved in 2015. Where then is the “Keluarga Malaysia” concept of Prime Minister Ismail Sabri, 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.
Further applying such a ruling retrospectively, whether back to 2015 or 1976 is clearly unconstitutional. 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 bumis will benefit?
Instead of battling corruption and crony capitalism benefiting the few, more emphasis should be placed on agencies to help the poor, like Permodalan Nasional Bhd (PNB) which manages the Amanah Saham Bumiputera funds. From managing RM30 billion in assets in 2001 to over RM323 billion today, PNB has grown more than 10-fold, and owns about 10 % of companies listed on Bursa Malaysia. Between 2016 and 2020, RM52.4 billion in dividends were distributed to more than 12 million bumi unit-holders.
Again, the question arises of how many poor bumis benefit, especially those from Sabah, Sarawak and orang asli, or is it concentrated in the hands of the rich bumis. What about the poor non-bumis then? MOF should reveal the latest figures.