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"The people's eyes are razor-sharp, so ASLI and the Government must reveal their methodologies and benchmarks, and let the people decide for themselves," Dr Lim said. "It's a waste time to keep arguing on whether it's 18% or 45%."

I totally agree with Dr. Lim.
I am sad that MCA is always keeping quiet about these sensitive issues instead of having the guts to say what is right or wrong.
Far as things look, the NEP has more than reached its 30% bumi quota a long time ago but there are some in the Govt who continues to be greedy at the expenses of others.

Kudos to you Mr. Khoo Kay Peng. Brillant analysis. Can't agree with you more.

As for our economic adviser to the Govt, it doesn't take a genius to see how great is our enonomy compared to our neighbours...even to S'pore who has no natural resources.
With 'brillant' people like Dr Zainal Aznam Yusoff and the way he articulated the 'inacuracies' of the bumi equity research findings, we ought to know where our economy is now and where it will be heading. Are you Oxford trained too?

The NEP has not done much to improve the living condition of poor Bumiputras who live under difficult conditions in many of the kampungs. This is evident when one drives into interior regions of Malaysia. Constant water & electricity supply are essential necessities that are scare to them. Their economic sustenance is a struggle. But on the other hand, the Datuks, Tan Sris and the elite Bumiputras are amassing wealth in Malaysia & abroad – this is very evident in a country like Australia. Will Pak Lah do anything to alleviate the situation? Forget the Malaysian Indians as many of them are still living a life of fantasy under the charisma of MGR, Jayalalitha, Karunanidhi & the politics of Tamilnadu.
The opinion expressed above is solely mine & I do not in anyway portray the opinion to be that of Jeff Ooi or any other individual associated with this site – Thank You.

This is sophistry of the highest order and hoodwinking at its most blatant.

If the government is serious in its defence of using par value to determine equity value, then I have a simple proposal:

Sell me all the companies in the porfolios of Khazanah and all the GLCs with investments in listed companies. I will pay them at par value. No, I will even pay them at 3 times the par value. Any taker?

The argument to include GLC is flawed. How can GLC be considered entirely Bumi enterprise? Because the procurement contracts and projects awarded to bumiputera companies? Rubbish! Let's take Tenaga for example, how many non bumi's benefited from IPP. YTL, Genting & Powertek are all non-bumi's and these are the major contracts awarded by Tenaga.How about the subcontractor of these contracts? Aren't most of them Chinese?

Hi zagato.

You have raise a valid point. Nether do I think GLC should be made a 100% Bumi company. However, if I read the ASLI report correctly, the report only attributes 70% of the total share value of CLCs to bumiputras. And the 70% was reached after taking into account the beneficiaries companies of all contarcts and/or projects awarded by GLCs. In away the 70% also reflects the population composition of Malaysia.

Don't you think that is a fair percentage? I notice that a lot of political leaders or academicians who criticize the Report have failed to notice or conveneintly ignore such important information.

The above is my personally readings from numerous source and I stand to be corrected.

It is the results of Half-Past Six (HPS) government economists that hookwinked the HPS ministers and PM.

The BN Govt might as well not giving any explanations to defend its 18.9% Bumi Equity Claim. These explanations only exposed the weaknesses of their economic advisors.

In fact, in other countries like Singapore, the listed companies have already taken steps to remove Par Value of their shares and what investors recognise is the market value of the shares.

The Par Value will be soon an obsolete term in the SGX exchange once all the listed companies amended their company acts. I am sure Bursa Malaysia will move in the same direction too.

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16.05.2005

Parliament approved further changes to the Companies Act, whereby investors and creditors no longer need to rely on par value in calculating paid-up share capital to get an accurate reading of a company’s underlying value.

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Abolition of Par Value Under Companies Act

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Financial Reporting Online
Issue 29, June 2005

Company law changes – managing capital for solvent companies

The Companies (Amendment) Act 2005 was passed by Parliament on 16 May and will take effect on a datethat has yet to be published in the Gazette. The main changes, nearly all of which relate to the share capital ofa company, give companies more flexibility in managing and restructuring their share capital. Representing a shift away from the previous emphasis on the capital maintenance concept, they make it easier for companiesto change their capital structure, provided they are solvent. It remains to be seen how directors will respond to making the required solvency statement and what practical difficulties they may face. As highlighted in previous issues of Financial Reporting Online (see Issues 9 and 28), the main changes are:
- Introducing no par value shares
- Allowing treasury shares
- Allowing capital reduction without court sanction
- Adding more situations where a company may give financial assistance for acquisition of its shares
- Allowing share-buyback to be made out of capital so long as a company is solvent
- Facilitating amalgamations without court sanction.

Some implications of the recent amendments are highlighted below.Share premium account –
....
...

They didn't say GLC is entirely Bumi enterprise. According to a newspaper, Asli multiplied it by 70%, which is the proportion of Malay in Malaysia population.

Even multiplying by 70% which is the bumi population it is still flawed. It does not mean that bumi gets 70%of the business this is pure rubbish because you are taking out subcontractors element as you guess it right are predominantly chinese. For companies like Tenaga the % of non bumi is even bigger if you take into account the IPP.

To me who gives a toss about % ownership, the most imporatnt thing is the distribution of the income. So what if Bumi has 50% equity, if the equity ownership is shared between 5 individuals

Tenaga’s par value is RM1.00 per share. Its Net Asset is RM5.24 per share. Its current traded price is RM9.80 per share.

As I said before, I am willing to pay RM3.00 for Tenaga’s shares with a par value of RM1.00 – I am giving them 3 times their value.

Hello, anyone in government who is still valuing the Bumi’s share at par value – I am willing to give you 3 times your value. Quick, while stock lasts.

Dear zagato,

You have struck the right cord again. You said "To me who gives a toss about % ownership, the most imporatnt thing is the distribution of the income."

Yes, the issue here is the distribution of income not only inter-races but also intra-race. And the contentions over % of share ownership is meaningless. To quote you again "So what if Bumi has 50% equity, if the equity ownership is shared between 5 individuals". In deed the same reaoning applies accross all communties in our beloved country. For this Dr. Lim Keng Yaik put it bluntly "the rich si aruing over what they have. Waht about those don't have anything?"

Personally, most if not all who participated in this discussion are all for the two noble objectives of NEP, i.e. eradication of poverty and elimination of identofocation of occupation with race. I believe, what is really in issue here is the method to implement NEP efficiently and successfuly that could really achieve sustainable results, particularly in helping the Malay community in sharing the economic cake of our nation. Let's be frank, thus far NEP has not been as successful as we all intended as there were simply too many "ketirisan" and abuses by a very small group of well-connected Malay businessman.

But what worry us now is it appears the very same flawed method is going or rather being adopted now to do the same thing! In other words, only a few privile group of Malay businessmen areb going to benefit and not majority of the Malay community.

Hence, many professional and acedemic groups have come up with suggestions on how to remedy the situation and one of them is ASLI. It is very unfortune that alot of the good proposals that could help making the achievemnet of NEP spirit more sustainable and effective have been brished aside, just because of the % dispute?!

Hi Zagato, you sound and appear very rational in articulate your points, and they are very pertinent and sharp as well. It has been my pleasure exchanging views with you here and I do looking forward to receive more of your very constructive opinion.

Zagato, your argument is flawed on the following reasons:

Whilst a GLC like tenaga is not taken into the 18.9% calculation, I'll bet my last dollar that the non-bumis IPPs like YTL, Genting & Powertek have been accounted as a non-bumi portion! These non-bumis IPP companies being public listed companies have also been accounted for in the ASLI report so everthing is being fairly accounted. These non-bumi IPPs existed because of Tenaga. Is it fair and correct that the main company are not taken into the calculations whilst dependent sub-contractors are? On the other hand instead of critising, can't you suggest a fairer basis?

You may not give it a toss about the % calculation as you did not sacrifice any thing. The non-bumis would give a great toss because it would have to come from their pockets! How would you feel if you contribute something earned from your sweat and tears to the tsunami victims but found that it goes to the rich organisers instead of the actual victims?

Sharp,

Not so sharp. Powertek and Genting and Pwertek IPP are not listed only YTL power is listed & mkt cap of a conglomerate does not necessarily reflect true value of the oprating business. Hence, you normally ascribe a discount when you value a conglomerate, a common practice in the market.

The point is is not easy to derive at the calculation of equity ownership. There's no perfect answer. The answers could be different if different methodologies are adopted.

Sharp,

The Malays are compliant lot. They would keep quiet most of the time even when people step on their head. The issues that non equitable distribution of income also affected the Malays but you rarely hear them complain. So are many other issues like scholarship and etc, but they say nothing.It is just in their culture. Silent as they may be but do not once think the issue only affect the non malay. Hence, if you want to use the argument of unequal distribution of income stop using racial argument.

Khoo's argument in letter to Malaysiakini is good: would [Zainal] be willing to propose to the government to swap one Tenaga share for two Farlim shares, as an example? This way the bumiputera community will be able to double up their number of share holding almost immediately.

Why not? If I can buy these shares at RM1, we can all sell our Kenaris and Hondas and take over a few % of Maybank, Tenaga, etc. First come first served.

Zagato,

You said that answers could be different if different methodogies are adopted. This is exactly my point - we don't know what methodogies that the 18.9% list is using other than that it is based on par value, GLC excluded, etc. Even you don't know for sure whether Powertek and Genting have been excluded or not in the Government list because it is shrouded in secretcy. Based on media reports, it states that it uses 600,000 companies so I said I'd bet my last dollar that these non-malays IPPs could have been roped into the calculation of the 18.9% list whereas the GLC is excluded!

Equity ownership % in itself means nothing. It has be be followed by an objective like 30% in voting power or 30% in
wealth. But why must it only be one list correct? Why can't it be that the two lists are correct? The difference is how you're going to interpret the results. The 18.9% list (600,000 companies) as reported in the media is based on the par value of share whereas the 45% list (public listed companies) is based on the market value of share. Both lists have their own usefulness. If you want to know the voting distribution (1 share 1 vote) then you refer to the first list. If
you want to know the wealth distribution (1 tenaga share is worth more than 1 Eden share) you refer to the second list. You and I know that. The problem right now is that there are certain people trying to hoodwink the not so knowlegeable malay masses to that the first list refers to everything including wealth distribution. That's why the malay masses are so worked up with the non-malays!

In fact both the malay and non-malay masses are both suckered by the elite governing power! The second list show that there are rich malays not sharing their spoils with the not-so-rich malays. It's a mandatory requirement that to be listed on the Bursa, a company must have a 30% bumi equity. Want to do a ceck yourself how fast the shares are sold off after listing? Then they queue again for another listing ...and another! They twist this fact to get the malay masses to squabble with the non-malays so that they would not question how the elite group amass these wealth. This is a fact!
Anyone arguing this is an apologist for the corrupt elite!

I agree with you that the malays are a compliant lot. That's because most of them are a dignified lot. Queueing up on a bus line, most dignified malays won't compain if the person ahead boards the bus ahead of him. This is a culture not only practised by the malays but also an universal culture. But unfortunately there are some unruly people who thinks that by virtue of the colour of their skin and political connections give them the right to cut the queue line by placing themselves to be number one, again and again. The irony is these people who jumped queue at the bus
stop already owns several Mercedez and here they are competing with daily commuters who need the bus for their livelihood!

When you talked about equal distribution of wealth are you referring to distribution by skin colour or by meritocracy? As
you have said yourself - different methodologies brings different results. There are no perfect answers. I think the word
"equal" would give you the clue which methodology should be the most universally acceptable one!