Published November 13, 2008

KL tweaks long-standing 30% bumi equity rule

Move intended to keep capital market competitive and progressive: Najib

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(KUALA LUMPUR) The government yesterday relaxed the 30 per cent bumiputra equity ownership for companies wanting to be listed but have yet to fulfil the quota.

Deputy Prime Minister Najib Razak said the relaxation, which would take effect immediately, was to ensure that the Malaysian capital investment market stays progressive and competitive.

He said that the companies concerned had to take specific steps and, under the reorganisation, needed to heed the conditions of the National Development Policy while continuing to offer the shares to institutions and bumiputra investors approved by the Ministry of International Trade and Industry.

He said, however, that the shares that were not subscribed could be offered to other bumiputras as part of the share voting process.

'I wish to stress that the 30 per cent bumiputra equity participation at the point of listing will continue to be enforced. However, there will be a slight change in terms of the methodology,' he told reporters after visiting the Securities Commission.

'This means that more individual bumiputras could apply for the shares concerned. If the shares offered to individual bumiputras are still not fully subscribed, then the company concerned is deemed to have fulfilled the 30 per cent bumiputra equity,' he said.

Asked whether this move would jeopardise the 30 per cent bumiputra equity, he said the action would allow other bumiputra individuals to participate and take up the public balloting.

'There are two tiers. After the two cuts, if the shares are still not taken up, it is only fair to allow the companies to be listed. Otherwise there will be a huge uncertainty for them,' he said.

Meanwhile, Securities Commission chairman Zarinah Anwar said to date, seven companies had not fulfilled the share ownership conditions.

She said the companies concerned had met the Securities Commission and had been given time to fulfil the condition.

'The share prices of these companies today have gone below their IPO pricing. Of course, it does not make sense then to compel bumiputras to subscribe as they will be able to buy the shares cheaper from the market,' she said. -- Bernama