Will Asli buckle down to mounting political pressures that it apologise and withdraw its report without an opportunity to thrash out with  the Economic Planning Unit in a rational and professional manner the differences between the official 18.9% and Asli’s 45%  bumiputra equity ownership figures

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Media Statement
by Lim Kit Siang  
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(Paliament, Tuesday) :  Strong-armed tactics and pressures  are being  applied  on the Asian Strategy and Leadership Institute (Asli) to withdraw and apologise for its Centre for Public Policy Studies (CPPS) study that bumiputra equity ownership is 45%.

Chairman of Gagasan Badan Ekonomi Melayu (Gabem) Chairman, Tan Sri Abdul Rahim Tamby Cik charged Asli of being motivated by “racial chauvinism” (cauvinisme kaum) while the Chairman of Dewan Perniagaan Melayu Malaysia Selangor (DPMMS), Tan Sri Rozali Ismail, who claimed to speak on behalf of 20 NGOs, demanded that Asli apologise and withdraw the report.

I can envision the tremendous pressures that are being applied on Asli and CPPS to apologise and withdraw its professional study, as it will relieve the Prime Minister, Datuk Seri Abdullah Ahmad Badawi of the necessity  to impose a “gag order” like the one imposed on public discussion on Article 11 and inter-faith commission as it will attract another round of brickbats.

Will Asli buckle down to mounting political pressures that it apologise and withdraw its report without an opportunity to thrash out with  the Economic Planning Unit (EPU) in a rational and professional manner the differences between the official 18.9% and Asli’s 45%  bumiputra equity ownership figures.

Will the Asli and CPPS directors be forced to apologise and withdraw the study, not because they are convinced that the study was professionally unsound and defective but because of the political muscles and  realities they have  to face?

Abdullah should realize that it will be a blot on his administration and another example of his failure to “walk the talk” of his pledge to “hear the truth” and lead  an open, accountable and transparent government even if Asli and CPPS are arm-twisted for political reasons to apologise and withdraw the report.

Any retraction or revision should only come after a discussion between EPU and Asli, where it is proved to the satisfaction of the multi-racial group of scholars and consultants behind the Asli report that they had been mistaken in their methodology and conclusions.

Otherwise, we are demonstrating that all the talk about Malaysia wanting to become a fully developed nation, breaking away from the   “First World Infrastructure, Third World Mentality” malaise, is just bunkum as it is still strong-armed tactics and threats rather than reason and arguments that  prevail in the country.

It will also make nonsense of two of the nine  strategic challenges and  objectives outlined in Vision 2020, viz:

• fostering and developing a mature democratic society, practising a form of mature consensual, community-oriented Malaysian democracy that can be a model for many developing countries.
• establishing a scientific and progressive society, a society that is innovative and forward-looking, one that is not only a consumer of technology but also a contributor to the scientific and technological civilisation of the future.

The  Prime Minister had brought up four issues in his comment on the CCCP study “Corporate Equity Distribution: Past Trends and Future Policy”, viz:

a)     that the government’s figures were based on an assessment of 600,000 companies nationwide, while the  CCCP study was an evaluation only of 1,000 publicly-listed companies;

b)     that the government’s tabulation was based on the par value of the shares of these 600,000 firms, while the CCCP appraisal was of the market value of listed stock;

c)      that while the CCCP  study attributed equity owned by the government-linked companies (GLCs) to Bumiputeras, the government did not include ownership of these shares in its tabulation. The government also argued that GLC-owned stock is not to be listed as equity attributable to Bumiputeras; and

d)     that of the volume of equity listed under ‘nominee companies’, only 13 per cent of it was owned by Bumiputeras.

I had myself over the years in Parliament questioned the validity, reliability and authenticity of the official statistics in the various five-year plans, including those on bumiputra equity ownership.

During the debate on the Ninth Malaysia Plan in Parliament on April 3, I made two important points about corporate stock ownership under the New Economic Policy and the various five-year plans:

• the   target of 30% ownership of corporate shareholdings by Bumiputras was but one and not the “be-all and end-all”  target of the NEP, whose overriding and overarching objective was  the achievement of national unity; and
• the target of  30% equity share for bumiputras had  been achieved by the end of the 20-year NEP in 1990, if the Malays had not sold off their share ownerships from bumiputra quotas for quick capital gain and shares held by nominee companies which were  mainly bumiputra interests had been taken into consideration.

I had said that the contention that the 30% target for Bumiputra equity holding had not been achieved; and that  Bumiputra holdings were   only 18.9% of total corporate equity was highly dubious, giving as reasons the use of par value instead of market value of listed stock apart from  the continuous divestment of bumiputra shareholders  and the volume of equity listed under “nominee companies”.

As I told Parliament: “So long as Malays can sell their shares to realize short-term profits, Malay equity ownership would never reach 30% even if the NEP was extended beyond 2020. If the Malays had held on and not sold the shares, the Malay equity would have reached 30% by its stated period of 1990.  An estimated 40% of the Malay preferential shares given were sold for profit gains.”

I also quoted Tan Sri Ramon Navaratnam, Asli director and  former Secretary-General in the Ministry of Finance, that recent studies indicated that Bumiputera own about 50% of the corporate sector.

As there is dispute about the different methodologies used  by EPU and CPPS in their different studies, the controversy should be resolved in an intellectual and professional manner with the publication of the methodology used by each and not on who has the louder voice and bigger muscle.

For this reason, the Cabinet tomorrow should uphold transparency and  approve publication of  the methodology used by EPU  to thrash out in a mature, rational and professional manner the differences between the official 18.9 per cent bumiputra equity ownership figure with Asli’s 45%.

The Cabinet should  make it clear that it would not countenance the use of strong-armed tactics and political pressures  to resolve intellectual arguments.

(10/10/2006)