The government has lamented that the private sector had failed as an ‘engine of growth’, as it had placed great reliance on the private sector to lift the Malaysian economy out of the recession and doldrums.
However, the government should take a deeper look at the problem as to why there appears to be a lack of private investor confidence in Malaysia. The government has announced a review and proposed changes to the Industrial Co-ordination Act. When the DAP warned in the 1970s that the ICA is the greatest dampener of domestic private investment, this was disputed by the Barisan Nasional government. Now, the government had to admit that what the DAP had been saying for the last decade was correct.
But the problem is more deep-rooted than just the Industrial Coordination Act. Lack of private investor confidence in the government stems from the arbitrary power of the government to change rules and regulations, not to mention laws, mid-stream, without consultation or notice, in utter disregard to the legitimate rights of those affected.
A good example is the sudden announcement of a new Trade and Industry Ministry guideline involving a major change in corporate ownership, i.e. that 51 per cent of new shares offered in a public issue must be reserved for bumiputras.
Under the new guideline, companies wishing to float their shares will now have to allot 30 per cent of the open portion of shares available for public subscription to Bumiputra individuals and wholly Bumiputra-owned companies and organizations registered with the Ministry. This is in addition to the 30 per cent made by way of private placement to government approved Bumiputra institutions. This works out to a total of 51 per cent of new shares in public issue being reserved for bumiputras.
What is shocking is the unseemly haste and off-handed manner in which such a major change in corporate ownership is carried out, without regard to the political and social ramifications of the new guideline.
Malaysians who subscribed to the MAS shares are particularly incensed, and rightly so, for when they subscribed to the shares, the new guideline of another 30% of the open portion of new public share issue had not been made. When the MAS shares were balloted, the subscribers found that the ground rules had changes, in mid-stream literally.
The MAS subscribers rightly feel that they had been cheated by MAS and the Ministry of Trade and Industry, for the MAS prospectus made no mention about the removal of 30% of the share issue from public subscription, which could have influenced their decisions whether to subscribe or not.
Why wasn’t the new guideline announced by a Ministry official, instead of by an official of a company issuing the MAS shares, and without adequate notice to the public so that they were not misled?
It is such high-handed and arbitrary governmental change of rules and regulations in mid-stream, in utter disregard of the rights of those affected, which is responsible for the lack of private investor confidence.
With the 51% of all new public shares issue reserved to bumiputras, will the 49% be solely for non-bumiputras, or there will again be an unofficial quota for this remaining 49%?
No top Minister has offered to give reason or justification for this new 51% guideline, and I call on the scrapping of this new guideline as counter-productive of the government effort to gain private investor confidence in the government.
BUY MALAYSIAN CAMPAIGN
The Ministry of Trade and industry has launched the Buy Malaysia campaign, to promote local goods and services to save on Malaysia’s Invisibles Account deficit.
Unfortunately, the campaign seems to be more a propaganda campaign than a serious one committing the entire government services and all its ancillary organizations.
I have just been informed that the JKR is laying Japanese pipes from Kulai to Johores Bahru instead of using local pipes. Why is this so?
Again, Malayan Banking, in its Maybank Building at Court Hill, has given the $2 million marble contract to Koreans when a Malaysian firm had tendered at a lower price, and had in fact, assembled 40 workers for the job lasting about 2 years. Instead, Malayan Banking had awarded the marbling contract to the Korean firm, displacing the job opportunities of some 40 Malaysians, as Korean workers were brought in for the job.
I cannot but ask whether the Government is at all serious about its Buy Malaysia Campaign.
When I suggested that Ministers should set an example with a Cabinet directive that all Ministers should not take their leave overseas, but must use local holiday destinations, the Deputy Minister evaded the issue altogether.
If the Minister who are saying so much about the Buy Malaysia Campaign are not serious in buying Malaysian goods and services themselves, how could they expect the campaign to bring any success or improvement to Malaysia’s Invisibles Deficit?
(Speech by Parliament Opposition Leader, DAP Secretary-General and MP for Kota Melaka, Lim Kit Siang in Dewan Rakyat on the Finance Companies Amendment Bill 1985 on October 24, 1985)