KUALA LUMPUR, May 9 — The country’s biggest Malay business association wants the government to divest all of its lucrative commercial holdings, instead of the current plan to only yield 10 non-core assets to Bumiputera interests.
The Malay Chamber of Commerce Malaysia (MCCM) said today the government’s target for Bumiputeras to hold 30 per cent equity in the economy was meaningless without profits.
Putrajaya insisted yesterday it was confident that the target will be reached by 2020, after it announced last month Bumiputera equity had breached 23 per cent in 2010.
But the MCCM told a press conference today that “equity is one thing, business is another.”
Syed Ali cited the example of Thistle Hotel in his hometown of Johor Baru, which “from day one was Malay-owned but (makes) no profit. What’s the point?”
“Better to have 100 RM3 million three-star hotels than a RM300 million hotel that makes no profit,” he said.
Datuk Seri Najib Razak had reaffirmed last month his commitment to a plan for Permodalan Nasional Berhad (PNB) and Khazanah Nasional to each yield five non-core businesses to Bumiputera firms as part of efforts to grow the community’s participation in the economy.
In February, the prime minister announced the that 10 government-linked entities will be divested to “worthy” Bumiputera owners, raising concerns from across the political divide that the move mirrors the failed Mahathir-era plan to groom Bumiputera entrepreneurs in the 1990s.
Last year, Khazanah made a total of eight divestments, which brought in proceeds of RM7.7 billion and helped to push the company’s profit before tax for the full year to RM5.3 billion from RM3 billion in 2010.
Key divestments included the sale of its 32 per cent stake in Pos Malaysia to Tan Sri Syed Mokhtar al-Bukhary’s DRB-Hicom Bhd for RM622.8 million and the complete privatisation of PLUS Bhd through a joint acquisition by UEM Group Bhd and the Employees Provident Fund (EPF).
In January, Khazanah also announced the sale of its 42.7 per cent stake in national carmaker Proton Holdings Bhd to DRB-Hicom, which is controlled by Malaysia’s richest Malay, for RM1.3 billion.
Syed Ali added today that the shifting of non-core businesses to Bumiputeras must “not be based just on whether they have the money but whether they can manage it or not.”
He added that MCCM members were well-placed to take over these activities as its 42 organisations were made up of 10,000 professionals including architects, lawyers, engineers, surveyors and scientists.