KUALA LUMPUR (Nov 5, 2007): The government has defended the move to
introduce a guideline requiring 30% bumiputra participation in
wholesale distribution business by foreigners.
Deputy Domestic Trade and Consumer Affairs Minister Datuk
S.Veerasingam said the 30% bumiputra equity ownership contained in
the guideline had been approved and accepted by the Cabinet on Oct
20, 2004.
"It is in line with the national development aspiration, which is to
rectify the economic and social imbalance and pay attention to the
development of a bumiputra industrial and business community," he
said in his winding up to points raised by MPs in the Budget 2008
debate in the Dewan Rakyat (Parliament) today.
He however added that the guideline requirement could be negotiated,
whereby the ministry could provide such companies a grace period to
find the necessary bumiputra partner or investment company.
On the move to set RM1 million as the minimum paid up capital of such
companies, Veerasingam said the move was to ensure that foreign
companies seeking to set up shop in the wholesale distribution sector
are genuinely competent in terms of finance and their ability to
manage the business.
"The ministry has also had to take into account the interests and
competitiveness of local investors if business opportunities are
opened up without any restrictions," he said.
On the guideline relating to racial composition of the directorship
and composition of personnel in such companies, Veerasingam said the
move was to ensure that all Malaysians, irrespective of racial
background, would be able to benefit from such foreign investments.
On the price increase of steel bars and its shortage, he said the
government had allowed the importation of the commodity to stabilise
the price and ensure sufficient supply.
"As a long-term plan, the government is also looking at an automatic
price mechanism to determine the price of steel bars based on the
cost of secondhand iron/steel in the world market," he said.
Veerasingam also said that the government had also agreed to
introduce a similar automatic price mechanism to determine the price
of cement from Jan 1.
"Through the automatic price mechanism and continued strict
enforcement, it is hoped that this would be able to stabilise the
price of both cement steel bars in the domestic market to fulfill
development needs," Veerasingam said.
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