Freight forwarders call for clarity on 51% Bumiputera rule

 

The freight forwarders federation has questioned whether owners are willing to lose control over their firms.

PETALING JAYA: An association of freight forwarders has urged the government to clarify its position on Bumiputera equity in logistics companies, with only months left before an end-of-year deadline.

Instead, the Federation of Malaysian Freight Forwarders has proposed that the requirement – possibly calling for a 51% Bumiputera ownership of their companies – be deferred to the end of next year.

The federation’s president Alvin Chua said former prime minister Najib Razak had announced a revision of Bumiputera equity requirements in 2018 and said it would be reviewed again at the end of 2020. However, that has yet to materialise.

In a letter dated Sept 18 to the government, Chua said the finance ministry had stated in January that all Customs brokerage licence holders must comply with Bumiputera equity requirements, but did not set any figure.

“It is already September 2021 and the deadline to comply is Dec 31,” he said in his letter to the international trade and industry ministry.

He said the lack of a final decision on the equity requirement, while the deadline draws nearer, was unfair to freight companies which must renew their Customs brokerage licenses by year end.

He said freight companies would have difficulty in meeting a 51% requirement in such a short time, and questioned whether there would be investors willing to take up the equity. “Or would Bumiputera investors prefer much safer investments?” he said in the letter to the ministry.

“Selling 51% of the business also means that the present owner can no longer control and run his business. If we can’t find Bumiputeras to actually invest in the companies before the Dec 31 deadline, it means that all the logistics companies with Customs brokerage licenses would close down,” he said.

Licences registered before 1976 do not have a Bumiputera equity requirement, while a 30% quota is imposed on those registered between 1976 and 1990, and a 51% Bumiputera requirement for licences registered after 1990. No Bumiputera equity is required for licenses held by integrated international logistics services providers. - FMT

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