Although Maybank Bhd has said that it will review its new ruling that with effect from 1-7-2007, one of the criteria for legal firms to be on its panel is that 50% of the equity of the partnership of the legal firm must be held by Bumiputras, its statement is ambivalent and unsatisfactory.
This is because the Maybank statement seems to imply two things:
- firstly, that existing legal firms which are already on the Maybank panel, and which had been given one year to comply with the new ruling, may now be exempted from the 50% bumiputra partnership ruling;
- secondly, that for all practical purposes, new legal firms will have to comply with the 50% bumiputra partnership ruling if they are to be emplaced on the bank’s panel.
In keeping with the principles of CSR (corporate social responsibility), Maybank Bhd should not speak in ambiguities but must make clear its policies and guidelines. For this reason, Maybank should clearly explain whether the 50% bumiputra partnership ruling for its panel lawyers will come into force on 1st July 2007 and how it will impact separately on its existing panel lawyers and new firms.
The controversy raised by the Maybank ruling, whether on the blogosphere or among the Malaysian public, have highlighted one important issue — that the few law firms doing good business with the government, statutory bodies or public listed companies with large government holdings are the politically connected ones, which is a more important consideration than whether they are bumiputra owned and operated or with substantial bumi equity.
Or as one poster on my blog put it: “In many of the cases if there is a bumiputra partner he’s probably a retired government servant or a stay-at-home mom who lends their names for a few bucks every month”.
I call on Maybank to be a model of CSR and make public the top 25 legal firms on its panel which have been given the most bank business each year for the past 10 years. This is to allow Malaysians to judge whether the criteria for legal firms on its panel who are given the most Maybank business are the politically-connected ones rather than based on meritocracy or other critera.
The New Economic Policy (NEP) was meant to be a 20-year policy from 1971-1990. The NEP had been productive of many injustices and power abuses and it is most regrettable that the NEP had recently been revived without any attempt to end all the betrayals and corruption of the NEP.
Malaysians have also been denied access to full and honest data about outcomes of the NEP, in particular the methodology and data used by the Economic Planning Unit (EPU) to compute ethnic breakdowns of NEP equity ownership.
In October, both the Prime Minister, Datuk Seri Abdullah Ahmad Badawi and Deputy Prime Minister, Datuk Seri Najib Razak had given undertakings to make public the EPU methodology and data for computing ethnic breakdowns of NEP equity ownership, after the controversy over the ASLI report on the subject.
More than six months have passed, but a thunderous silence have descended on the issue despite repeated public reminders, including by DAP MPs in Parliament, calling on the government to honour its undertaking to make public the EPU methodology and data on ethnic breakdowns of NEP equity ownership. What has the government to hide?
Since then, a 2002 University of Malaya research study has come into the public domain with the finding that the 30 per cent bumiputera equity ownership as targeted under the NEP had been achieved a decade ago in 1997.
The research, entitled “Bumiputeras in the Corporate Sector — Three decades of performance 1970-2000”, by Dr. M. Fazilah Abdul Samad, head of department of finance and banking in the Faculty of Business and Accountancy, was based on a 10-year analysis of bumiputera equity ownership between 1988 and 1997 of public listed companies on the Kuala Lumpur Stock Exchange (KLSE), now called Bursa Malaysia.
According to Fazilah’s study, bumiputera equity ownership reached 33.7 per cent in 1997, comprising 30.6 per cent bumiputera corporate equity ownership and 3.1 per cent individual bumiputera share ownership.
This is however an underestimate, as it did not include nominee company ownership which many economists have argued would be held in the majority on behalf of bumiputeras.
Furthermore, it does not take into account government-held ownership (9.5 per cent), as was done in the study by the controversial Asian Strategy and Leadership Institute (Asli)’s Centre for Public Policy Studies. Both the University of Malaya and ASLI studies have arrived at very similar conclusion of 45% bumiputera equity ownership achievement if 70% of government-held ownership are attributed to bumiputeras.
There should be a total freeze on NEP extensions like the new Maybank ruling requiring 50% bumiputera partnership for panel law firms until the government has honoured its undertaking to make public EPU methodology and data for computing ethnic breakdowns of NEP equity ownership.
This matter should be given top priority in the Cabinet meeting on Wednesday.
(Media Conference Statement in Parliament on Monday 7th May 2007 after the urgent motion by DAP MP for Bandar Kuching Chong Chieng Jen to debate this subject was rejected by the Speaker)