by Parliamentary Opposition Leader, DAP Secretary-General and MP for Tanjung, Lim Kit Siang, in Petailing Jaya on Friday, 13th March, 1992:
DAP calls for the removal of 100% local companies, including their acquisitions, mergers and takeovers from the purview of the Foreign Investment Committee.
The Minister for International Trade and Industry, Datuk Seri Rafidah Aziz, has said that the proposed new guidelines of the Foreign Investment Committee (FIC), to regulate both foreign and local investments is just a draft and that the private sector should not be unduly concerned about it.
As Minister for International Trade and Industry, Rafidah Aziz should be aware that investors, both foreign and local, are highly sensitive to proposed changes in the investment rules in the country, especially if the government is contemplating radical depar¬tures from its promises under the National Development Policy (MDP) to pursue a more liberal policy than under the New Economic Policy.
Rafidah should not be surprised by the great sensitivity of the foreign and local investors to the FIC
draft guidelines. What Rafidah should have been surprised is insensitivity of the FIC in proposing new guidelines which had created widespread anxiety among both foreign and local investors.
FIC has trespassed into policy areas which are outside its terms of reference and which should be the
exclusive preserve of its political masters – the Cabinet and Parliament.
Rafidah Aziz should direct the FIC to withdraw the new guidelines as the FIC had trespassed into policy areas which are clearly outside its purview and terms of reference.
For instance, under the NDP, the government has shifted its emphasis from the restructuring of equity along racial lines to a broad programme aimed at achieving high-speed growth through industri¬alisation.
The Prime Minister, Datuk Seri Dr. Mahathir Mohamed him¬self said in Parliament when introducing the NDP that restructuring was not so much the achievement of specific numerical targets but to improve the capacity of the bumiputras to create wealth and manage it.
Thus, when the FIC’s draft guidelines aimed at a 30 per¬cent bumiputra stake in corporate Malaysia, requiring companies to conform with the 30 per cent stake, it has strayed into a policy area which is the special oresarve of the political masters of the FIC, namely Cabinet and Parliament, and completely outside its terms of reference.
The FIC’s draft guidelines in fact even went beyond the provisions under the New Economic Policy.
For instance, under the NEP, the Government stressed that the 30 per cent bumiputra stake represented
a global figure, and not a micro figure which must be complied by every company.
However, under the FIC’s draft guidelines, companies which had complied with the 30 per cent bumiputra stake would be compelled to restore it to that level should there be subsequent dilution.
Another highly objectional provision of the FIC’s new draft guidelines is the one requiring both private and public compa¬nies with shareholders’ funds of more than $2.5 million to restructure their equity to give bumiputras a 30 per cent stake.
Rafidah Aziz should explain why civil servants in the FIC are allowed to stray into policy issues and make political decisions which should be the exclusive preserve of the Cabinet and Parliament.
MCA and Gerakan Ministers are playing so marginalised a role in Government that civil servants can usurp their political powers.
It is most shocking that MCA and Gerakan Ministers are now playing so marginalised a role in the Barisan Nasional government, that they have even allowed civil servants to usurp their political powers
in government without any protest!
As the FIC had strayed into policy areas, arousing great anxieties and fears among foreign and local investors, Rafidah Aziz should act firmly to direct the FIC to withdraw the draft new guide¬lines.
The FIC was formed by the government to be responsible for major issues affecting foreign investments, and in particular the acquisition and control of Malaysian assets, companies and interests by any foreign interest.
Under the NDP, the FIC should be confined strictly to these terms of reference, and 100 per cent local companies, including their acquisition, mergers and takeovers which do not involve any foreign interest, should be removed from the jurisdiction of the FIC.
This will be the government’s greatest contribution in promoting industrial growth by creating the national environment which would stimulate the advancement and progress of local industries, to enable them to foster and sustain competitive advantage necessary for them to succeed in the highly competitive world of today.