Oct 28, 2008

Tun Mahathir against abolishing Bumiputera equity

Malaysia should retain the 30% bumiputra equity in public-listed companies as the objectives of the New Economic Policy (NEP) have not been achieved yet, said former prime minister Tun Dr Mahathir Mohamad.

KUALA LUMPUR, Oct 28 - Former Prime Minister Tun Dr Mahathir Mohamad disagrees with the MCA’s proposal that the conditional 30 per cent Bumiputera equity ownership in public-listed companies be abolished.

He said this was not the right time to do so as the target for Bumiputera equity participation had not been achieved.

"If we have achieved the 30 per cent target for Bumiputeras, 40 per cent for non-Bumiputeras and 30 for foreigners, then we can do away with the condition," Dr Mahathir told reporters at the Malaysia Muslim Welfare Organisation (Perkim) Aidilfitri function here today.

“We have not reached that yet... there’s still a lot to be done. If we reduce it to 20 per cent today and it does not expand while the economy does, the Bumiputera equity participation will get smaller. We have to take all this into consideration.”.

Dr Mahathir, who is Perkim president, said although the equity ownership could be changed, the target for Bumiputeras needed to be protected.

“This is not a suitable time to make any adjustment as the world is in turmoil. It does not mean that if we abolish the equity quota it will make the companies stronger and more competitive.

“If we reduce the Bumiputera equity participation to 20 per cent, then the others must also reduce theirs,” he said.

Dr Mahathir said the issue should have been brought to the Barisan Nasional’s attention as it was raised by a BN component party.

Yesterday, MCA vice-president Datuk Liow Tiong Lai said the condition for 30 per cent Bumiputera equity in public-listed companies should be abolised in order for them to remain competitive.

Liow was also quoted as saying that the 30 per cent target set was a hindrance to the creation of true partnership between Malay, Chinese and Indian businessmen in the country.

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