GLCs were part of Malay equity, says Dr M
Lee Wei Lian, The Malaysian Insider
The country’s government-linked companies (GLCs) were once considered part of bumiputera equity, said Tun Dr Mahathir Mohamad today, which could mean that bumiputera corporate holdings might have exceeded the original 30 per cent target in the past.
The former prime minister said that GLCs and state investment arm Khazanah Nasional were established to hold equity in trust while Malays strengthened themselves economically and that the equity was meant to be later distributed to the Malays.
He said that GLCs were established in trust for Malays but have since deviated from their original purpose.
“GLCs are holdings in trust and were considered part of bumiputera equity,” said Mahathir (picture) at a press conference today after closing the Malay Economic Congress here. “Now the holdings belong to the companies concerned and they cannot be regarded as bumiputera holdings.”
The definition of whether GLCs are considered part of Malay equity could have implications on affirmative action programmes for Malays as many Umno leaders maintain that Malay equity stands at only about 20 per cent today, which is below the target of 30 per cent set in the New Economic Policy (NEP).
If GLCs, which comprise a large chunk of the economy and also make up a significant number of the benchmark FBM KLCI index components, were at one time considered to be Malay equity, it is possible that the 30 per cent target was exceeded in the past.
State oil company Petronas is also Malaysia’s sole representative in the Fortune 500 list of the world’s largest companies.
Some observers have argued that GLCs appeared very much to be Malay companies due to their management and employee makeup as well as their activities and should be counted as Malay corporate holdings.
The government has said that GLCs cannot be considered bumiputera equity as they are controlled by the government.
The Malay Economic Congress also passed a resolution today criticising GLCs, and in particular Petronas, Khazanah and PNB, saying that they should have a stronger Malay agenda.
