FORMER finance minister Lim Guan Eng said the proposal to enforce the 51% Bumiputera ownership requirement for freight forwarding companies to obtain customs licenses was brought up during his time in office but he had rejected it.

Lim said in a statement today he rejected the proposal on the basis that it cannot be applied retrospectively.

“That is unconstitutional and unfair to the companies.

“The government will be liable to compensate these companies if they suffered losses due to the need to meet the requirement.

“It is unfair to those who have built and invested in the companies based on existing conditions only for them to be abruptly changed without due recourse,” he said.

The Bagan MP said the move would also send the wrong signal to investors that government policies can be changed at a whim, adding that investors want certainty, consistency and clarity in policies.

He said the failure to ensure this will discourage investors and Malaysia may end up losing its competitive edge to other countries.

Lim urged current Finance Minister Tengku Zafrul Tengku Abdul Aziz to do the needful, adding he would raise the issue in hopes of having the ruling reversed to uphold the practice of good governance.

In January 2021, the ministry announced that all applications for customs licenses must meet the Bumiputera equity requirement although the actual percentage was not stated.

The companies were also informed that non-compliance with the Bumiputera equity requirement by December 31 would result in the cancellation of their customs licenses.

Last week, the Federation of Malaysian Freight Forwarders – representing more than 1,500 logistics companies – sent a letter to International Trade and Industry Minister Mohamed Azmin Ali asking for clarification on the requirement.

The federation said in its letter, which was sighted by The Malaysian Insight, that companies would be compelled to sell 51% equity to Bumiputera investors.

“The question is: within this short time frame and difficult prevailing economic conditions, would there be Bumiputera investors wanting to buy over 51% equity? Or would the Bumiputera investors prefer much safer investments?

“And, if present logistics companies are compelled to sell a majority share to Bumiputera investors, it would mean that the government is telling us to sell our business to Bumiputeras or close down our business.

“Selling 51% of the business also means that the present owner can no longer control and run his business,” the letter stated.

FMFF also said that Bumiputeras were already in the logistics business and many logistics companies were 100% Bumiputera-owned, with the government already giving them special incentives to be involved in turnkey logistics services to the government. – September 23, 2021.