Bumi equity- 18.9% or 45%?

Bumi equity: 18.9% or 45%?

Media statement by Ronnie Liu Tian Khiew, DAP CEC member and NGO bureau chief on Sunday, October 01, 2006 in Petaling Jaya.

The 9MP claims that in 2004, the Bumi equity stays at 18.9%, and the Chinese owns 39%, Indians 1.2%, nominee companies 8%, others 0.4% and foreigners 32.5%.

Khairy Jamaluddin and other UMNO leaders talks of the failure of the New Economic Policy(NEP) to fulfill its objective of 30% Bumi equity compared with the 18.9% in 2004 and that the Ninth Malaysian Plan(9MP) is the final chance to achieve it.

Prof Dr Lim Teck Ghee of Centre for Public Policy Studies (CPPS), an independent think-tank, argues with facts and figures and even the methodology the centre uses to state that the Bumi equity has reached some 45%.

We have yet to hear from Khairy or any other UMNO leaders that the figure quoted by ASLI was incorrect.

So far, we only hear some disagreement from one or two academicians. But none of them have put forward any argument.

Teras, a Malay NGO, now questions the motive of CPPS for doing such study. The organization did list some arguments but somehow has failed to prove the 18.9 % claim right or prove the 45% figure wrong.

I agree with Teras that the Government should seriously look into the disparity of income within the same ethnic groups rather than only focus on the disparity of income between the different races. We do not want to see any of our Malaysian community being marginalized in our own country.

We hope the Prime Minister could share with us the methodology used by his administration to reach the 18.9% figure, now that the figure has been seriously challenged by ASLI and other prominent academicians.

Meanwhile, Prof Dr Lim has openly requested those who disagree with the CPPS findings could challenge them with facts and figures and the methodology applied.

In February 2006, Professor Dr Lim Teck Ghee submitted a report that showed as at 30 September 2005, Bumi ownership of shares in Bursa Malaysia amounted to 45% or RM 325.08 billion out of the market capitalization of RM 715 billion. The CPSS is set up by the independent think-tank Asian Strategy and Leadership Institute as an independent research group, headed by Professor Dr Lim Teck Ghee. Professor Dr Lim indicated that if the Bumi had not sold off their shares, their equity stake would easily have been higher than the 45%. An estimated 40% of the preferential shares given to Bumis were sold by them for profit gains.

On the other hand, DAP Secretary General Lim Guan Eng believes that the 18.9% figure was incorrect because “the 18.9% Bumi equity is based on par value of share capital of limited companies.”

He said “the value of share capital is a false reflection of the real or true worth of the company. A more accurate assessment, though not the most comprehensive and objective test, would be to take the market value of Bumi equity of all listed companies in Bursa Malaysia (BM).”

Lim further argues that “the more important question then is therefore not attaining 30% Bumi equity which has been achieved but who amongst the Malays owns the 45% Bumi equity of BN based on market capitalization.”Lim also argues that the Barisan Nasional Government should adopt the correct macroeconomic policy and discard nationally divisive and outdated policies of quotas and subsidies.

“Such racial policies like the NEP must be replaced by those which forges national unity and encourages competition, value creation and meritocracy.” He argued.

Lim has urged all Malaysian to abandon the racial premise of the NEP and its false pursuit of 30% Bumi equity.

/ Ronnie Liu Tian Khiew