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Govt defends 30% bumi equity quota on foreign businesses
The Sun (5/11/2007): The government has defended the move to introduce a guideline requiring 30% bumiputra participation in wholesale distribution business by foreigners.
Deputy Domestic Trade and Consumer Affairs Minister Datuk S.Veerasingam said the 30% bumiputra equity ownership contained in the guideline had been approved and accepted by the Cabinet on Oct 20, 2004.
"It is in line with the national development aspiration, which is to rectify the economic and social imbalance and pay attention to the development of a bumiputra industrial and business community," he said in his winding up to points raised by MPs in the Budget 2008 debate in the Dewan Rakyat (Parliament) today.
He however added that the guideline requirement could be negotiated, whereby the ministry could provide such companies a grace period to find the necessary bumiputra partner or investment company.
On the move to set RM1 million as the minimum paid up capital of such companies, Veerasingam said the move was to ensure that foreign companies seeking to set up shop in the wholesale distribution sector are genuinely competent in terms of finance and their ability to manage the business.
"The ministry has also had to take into account the interests and competitiveness of local investors if business opportunities are opened up without any restrictions," he said.
On the guideline relating to racial composition of the directorship and composition of personnel in such companies, Veerasingam said the move was to ensure that all Malaysians, irrespective of racial background, would be able to benefit from such foreign investments.
On the price increase of steel bars and its shortage, he said the government had allowed the importation of the commodity to stabilise the price and ensure sufficient supply.
"As a long-term plan, the government is also looking at an automatic price mechanism to determine the price of steel bars based on the cost of secondhand iron/steel in the world market," he said.
Veerasingam also said that the government had also agreed to introduce a similar automatic price mechanism to determine the price of cement from Jan 1.
"Through the automatic price mechanism and continued strict enforcement, it is hoped that this would be able to stabilise the price of both cement steel bars in the domestic market to fulfill development needs," Veerasingam said.
Deputy Domestic Trade and Consumer Affairs Minister Datuk S.Veerasingam said the 30% bumiputra equity ownership contained in the guideline had been approved and accepted by the Cabinet on Oct 20, 2004.
"It is in line with the national development aspiration, which is to rectify the economic and social imbalance and pay attention to the development of a bumiputra industrial and business community," he said in his winding up to points raised by MPs in the Budget 2008 debate in the Dewan Rakyat (Parliament) today.
He however added that the guideline requirement could be negotiated, whereby the ministry could provide such companies a grace period to find the necessary bumiputra partner or investment company.
On the move to set RM1 million as the minimum paid up capital of such companies, Veerasingam said the move was to ensure that foreign companies seeking to set up shop in the wholesale distribution sector are genuinely competent in terms of finance and their ability to manage the business.
"The ministry has also had to take into account the interests and competitiveness of local investors if business opportunities are opened up without any restrictions," he said.
On the guideline relating to racial composition of the directorship and composition of personnel in such companies, Veerasingam said the move was to ensure that all Malaysians, irrespective of racial background, would be able to benefit from such foreign investments.
On the price increase of steel bars and its shortage, he said the government had allowed the importation of the commodity to stabilise the price and ensure sufficient supply.
"As a long-term plan, the government is also looking at an automatic price mechanism to determine the price of steel bars based on the cost of secondhand iron/steel in the world market," he said.
Veerasingam also said that the government had also agreed to introduce a similar automatic price mechanism to determine the price of cement from Jan 1.
"Through the automatic price mechanism and continued strict enforcement, it is hoped that this would be able to stabilise the price of both cement steel bars in the domestic market to fulfill development needs," Veerasingam said.
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