IRATE over confusing regulations, the Federation of Malaysian Freight Forwarders (FMFF) asked whether Government was telling them to sell majority stake to Bumiputera investors or get shuttered soon.

“If local logistics companies are compelled to sell a majority share to Bumiputera investors, it would mean that the Government is telling us to sell our business to a Bumiputra or close down.

“Bear in mind that by selling 51% of the business, it means the present owner can no longer control and run his business,” said its president Alvin Chua, in a letter dated Sept 18 addressed to Senior Minister (International Trade and Industries) Datuk Seri Mohamed Azmin Ali.

It is to note that freight forwarders registered before 1976 did not have a Bumiputera requirement, with a 30% quota imposed on those registered between 1976 and 1990.

But companies registered after 1990s are compelled to have 51% Bumiputera ownership. Oddly, integrated international logistics service providers (IILS) were exempt of the regulation.

Touching on the matter, Chua said that it was nonsensical for the Government to call for compliance from local freight forwards while exempting foreign players from the requirement.

“The decision makes no sense as it would favour foreign-owned IILS companies and stifle the growth and capacity of local companies,” he stated.

Chua added that local freight forwarders took years of effort to build their businesses as compared to other sectors, as the logistics industry was fragmented and highly competitive.

With the 51% Bumiputera equity rule from the Finance Ministry (MOF), he opined it would pose immense difficulty to them.

“It appears that companies would have no choice but compelled to sell 51% equity to Bumiputra investors,” he quipped.

Retain status quo

Chua also queried on whether would there be any Bumiputera investor interested to invest within this short timeframe frame, compounded with the tough economic condition.

With the deadline fast approaching, which is Dec 31, the FMFF official urged the Government to clarify the matter soon as they risk having their customs license withdrawn.

“We believe that in the present situation, it is best the Government retain the status quo decided by the MOF back in 2018 and extend the deadline to comply with the Bumiputra equity requirement to Dec next year so that we find an equitable solution to this issue.

“And please note that Bumiputera are already in the logistics business and many companies are 100% Bumiputra owned.

“Plus, Bumiputera had been given special incentives to be involved in turnkey logistics services to support the Government,” Chua remarked. – Sept 23, 2021