KUALA LUMPUR, Sept 25 — Bangi MP Ong Kian Ming called today for objective discussions on the Finance Ministry’s proposal to require local logistics operators to have 51 per cent Bumiputra ownership.

He said the ministry’s decision to postpone the requirement was not a long-term solution.

Instead, Ong said relevant stakeholders including the Ministry of International Trade and Industry, the Ministry of Transport, Malaysia Investment Development Authority (MIDA), port operators, logistics operators, business chambers, financial institutions and politicians must discuss the matter exhaustively.

"I am sure that my colleagues and myself who have experienced in MITI, MOF and MOT would be willing to participate in an honest and open dialogue, in the spirit of the MOU that was recently signed by PH and the Keluarga Malaysia government, so that we can have a mature discussion and avoid politicking via newspaper headlines,” he said in a statement today.

On September 23, the MOF had announced the postponement of the equity requirement until December 31, 2022.

Under a 2018 review, local logistic companies whose licences were registered before 1976 did not have a Bumiputera equity requirement, while a 30 per cent quota was imposed on those registered between 1976 and 1990.

A 51 per cent Bumiputera requirement was required for licences registered after 1990 — the year the Bumiputera equity policy was first implemented.

However, integrated international logistics service (IILS) providers do not need to have any Bumiputera equity.

Ong, a former deputy minister for international trade and industry, also noted that there could be major business repercussions if the MOF eventually enforces the equity requirement.

He said that apart from the ones raised by FMFF earlier this week such as the short time frame and the challenge of finding suitable Bumiputera buyers who are willing to pay a fair price when economic conditions are still very fragile, domestic operators may also choose to relocate their holding companies abroad.

One said this was because the Bumiputra equity requirement did not affect companies that are majority owned by foreign companies.

"In the longer term, these companies may even shift some of their logistics business away from Malaysia and this will decrease the flow of goods and services through Westport and Northport in Port Klang, PTP in Johor and Penang Port, just to name a few.

"This kind of policy will also reduce the incentives for domestic logistic providers to grow their business in Malaysia because of the fear that once they grow to a certain size, they will be forced to sell a portion of their business and even lose control of their business,” he said.

Ong also said the decision would send the wrong signal to foreign investors in the logistics sector, including those who planned to make Malaysia their regional hub, as there would be fear they may be forced to relinquish the majority stake in their operations here.