by Parliamentary Opposition Leader, DAP Secretary-General and MP for Tanjung, Lim Kit Siang, in Petaling Jaya on Thursday, 26th Marchn 1992:
DAP welcomes the withdrawal of the proposed new FIC guidelines which have undermined both foreign and local investor confidence.
DAP welcomes the announcement by the Finance Minister, Anwar Ibrahim, yesterday on the withdrawal of the proposed new Foreign Investment Committee (FIC) guidelines which have undermined both foreign and local investor confidence in the country.
The DAP and DAPSY have been the only voices calling for the withdrawal of the FIC proposed new guidelines because it had created uncertainty and anxiety among both foreign and local investors, caused the fall of the Kuala Lumpur Stock exchange, but even more serious, violated the National Development Policy (NDP) 1991-2000 and repeated promises by the Prime Minister, Datuk Seri Dr. Mahathir and the Fi¬nance Minister, Anwar Ibrahim, that the government will now be more open and liberal than under the New Economic Policy.
The DAP and DAPSY do not want to claim any credit for the withdrawal of the FIC’s proposed new guidelines, but in future, if MCA, Gerakan or even UMNO leaders ask what the DAP can do, the withdrawal of the FIC’s proposed new guidelines will be a good answer as no political party apart from DAP and DAPSY had publicly called for its withdrawal.
The DAP and DAPSY had been pressing hard for the Cabinet to take an immediate decision to withdraw the FIC’s proposed new guidelines for three reasons:
Firstly, the effect of the FIC’s proposed new guidelines in discouraging foreign and local investments will be even worse than the Industrial Co-ordination Act in the 1980s;
Secondly, the FIC’s proposed new guidelines has trespassed into a policy area which should be the sole preserve of the Cabinet and Parliament, as aiming at a 30 per cent bumiputra stake in corpo¬rate Malaysia, when the NDP adopted by the Cabinet and Parliament made it clear that “no specific time frame has been set for the attainment of the equity restructuring of at least 30 per cent”.
Thirdly, at a time when the country faces drastic drop in foreign investments as a result of slowdown of economies of the indus¬trialised countries such as the US, the UK, Germany and Japan, and even Singapore, the government should be creating better conditions rather than formulating new rules which will frighten of not only foreign investment but local investors as well.
If not withdrawn, the FIC’s proposed new guidelines will be chief cause why Anwar Ibrahim’s forecast that the Malaysian economy will grow by 8.6 per cent this year will not be met.
There is no doubt that if the FIC’s proposed new guidelines is not withdrawn, it would be a major cause why Anwar Ibrahim’s fore¬cast that the Malaysian economy will grow by 8.6 per cent this year will not be met.
What is unthinkable is why the FIC had been allowed to draft such far-reaching proposals in the first place?
The far-reaching effects of the FIC’s proposed new guide¬lines include the following:
1. Companies which had complied with the 30 per cent bumi¬putra stake would be compelled to restore it to that level should there be subsequent dilution;
2. Companies can be compelled to restructure their equity even when not undertaking transactions requiring FIC approval up till now;
3. When a private company seeks to become a public company, not only the public company has to comply with, the 30 per cent bumipu¬tra equity quota, the private holding company also has to comply with the 30 per cent bumiputra stake;
4. Companies involved in sectors where bumiputras have traditional presence or strategic holdings might be required to maintain at least 50 per cent bumiputra stake; and
5. A ceiling of 30 per cent for foreign equity in companies seeking a listing on the KL stock exchange.
Call on Anwar Ibrahim to give assurance that none of the objectionable provisions in the FIC’s proposed new guidelines would, be introduced by the government in any other form during the 10-year National Development Policy.
While welcoming the withdrawl of the FIC proposed- new guidelines, DAP calls on Anwar Ibrahim to give an assurance that none of the objectionable provisions in it would be introduced by the government in any other form during the 10-year National Development Policy, whether directly or indirectly.
This is because the Barisan Nasional government and its officials have developed great skill in introducing rules and regula¬tions under various disguises and forms.