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'Bumi equity rule doesn't solve challenges faced by freight forwarding companies'

KUCHING: The Finance Ministry has been urged to consider the impact of the Malaysian international trade and entrepreneurial spirit should the 51 per cent Bumiputera equity for freight forwarding companies be imposed in Dec 2022.

Sarawak United People's Party (SUPP) women's chief Kho Teck Wan said such a requirement under the New Economy Policy (NEP), which was introduced in 1971, is no longer in line with current times.

She said the county's economy is as strong as the purchasing power of the majority, not a few selected (races/groups) and doubts if such a requirement could contribute in any way.

"Besides, no entrepreneur in the world regardless whether they are Bumiputera or not, would want to build a business just to sell 51 per cent ownership and become a minority shareholder, especially if the company is a family owned business that is built over a few generations," she said in a statement.

Most of the logistics companies, she said, have been suffering from an extraordinarily challenging time due to this global supply chain crisis following the Covid-19 pandemic.

Kho said these companies were facing container shortages, ocean freight price increases, air freight crises due to reduced global flights, and shortage of front-line operation staff as the pandemic worsened globally. And now, they are facing a deadline to ensure their companies have 51 per cent Bumiputera ownership by Dec 2022.

"By extending or postponing the duration for local companies to comply with the Bumiputera participation rule to next year doesn't solve the issue faced by freight forwarding companies, it merely prolongs the execution of the requirement.

"I hope Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz, with decades of solid finance and investment background, is able to understand and know what should be done to reform our economy better, and to benefit everyone," she said.

Kho said although former Finance Minister Lim Guan Eng claimed he rejected the 51 per cent Bumiputera equity requirement for freight forwarding companies, however, nothing was done to rectify the issue, and such a requirement was never retracted.

"As the country moves forward with the new government, we should focus on friendly economic policies that can help the economy recover while increasing the median household income," she said.

It was earlier reported that the Finance Ministry had postponed the enforcement of a 51 per cent Bumiputera ownership requirement for freight forwarding companies to Dec 31, 2022.

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