Present way to raise bumi equity a dead end, says PM

(The Star) – A new strategy is needed to increase bumiputra equity from the 18.9% it has been stuck at in the last 19 years, said Prime Minister Datuk Seri Najib Tun Razak. Handing out shares has clearly not worked, he said.

He said it was time to help bumiputra companies that were capable and have the potential to succeed domestically and globally.

To date, Najib said some RM54bil in shares had been allocated to bumiputras but only RM2.4bil was left because they were often sold off immediately.

He said the reasons for the mass sell-out included poor holding power, not being serious about holding onto the shares, the high gearing cost of buying the shares or not being able to take part in the running of the company since the shareholders did not have a 30% stake.

Najib, who said this when opening the Pagoh Umno delegates meeting here yesterday, had everyone in stitches when he pointed that those who received bumiputra shares were not ordinary folk but mainly influential people “who sat in the front rows at functions such as Tan Sris and Datuk Sris.”

Noting that was why the bumiputra equity had stood at only 18.9% in the past 19 years, he said it would be madness to continue hoping the outcome would improve.

One way to change the situation, said Najib, was through Equi-nas Nasional Bhd (Ekuinas), a private equity fund for bumiputras.

He said he wanted to see bumiputra entrepreneurs who would not only become champions domestically but also internationally.

Najib, who said the details of Ekuinas would be made public today, added that the fund would help bumiputra entrepreneurs look for capital and adopt efficient management styles.

Najib also talked about the liberalisation of the services sector, changes to Umno, the abolition of teaching science and mathematics in English, his 1Malaysia concept and preparedness to face the next general election.

On liberalisation, he said Malaysia’s closed services sector was similar to Myanmar.

“We invest in other countries but we do not allow others to invest here,” he said, adding that Indonesia, Cambodia and Thailand had opened up their services sector.