Here is the news:
- Khazanah and PNB have been asked to divest their non-core businesses. These will then be managed by qualified bumiputra companies
- “five companies each from Khazanah and PNB had been identified for this purpose”
- selected from among 80 high-performing organisations via an open tender process.
- based on merit and business potential.
- The companies not guaranteed Government work contracts
- would be given assistance to boost management, financial, and technological abilities.
If this is done properly then it is really good. Congratulations to Dato Sri Najib for announcing this. I believe ever since the New Economic Policy was formulated by his father the late Tun Abdul Razak this is the first time that a decision has been made to hive off feasible businesses "via an open tender process".
So hopefully no more selection through cronyism. It gets even better "companies not guaranteed Government work contracts".
Hmm..well in the first place are there that many PNB or Khazanah companies that have been in business or even competing in the market without some form of Government assistance? I dont think so. These companies may not be guaranteed Government work contracts but does that mean they will be totally cut free from Government assistance?
Because in the next breath the Prime Minister says : "would be given assistance to boost management, financial, and technological abilities"
So they will still be given assistance to boost management, financial and technological abilities. The Government has to be careful and has to be clear about this.
Say a company needs RM20 million to boost its management, financial, and technological abilities. This RM20.0 million must come from revenues derived from its sales. That is how all other companies around the world will do it. Say the company makes a 20% margin of profit. So the company must make sales of RM100.0 million in order to be able to generate RM20.0 million profits which can then be used to boost its abilities.
This means the company must undertake business or projects worth RM100.0 million, its salesmen must be market oriented to make RM100.0 million worth of sales, its project managers must deliver RM100.0 million worth of products and services on time and all the other aspects of managing a business.
Now if the Government were to 'bagi saja' this RM20.0 million, then the company will not need to increase its business by RM100.0 million. Its salesmen need not work harder to make extra RM100.0 million in sales. The project managers need not learn to manage their schedules to deliver RM100.0 million worth of products according to schedule. Why? Because they get money from the Government. The curse of easy money again. Lama lama, the company will become weak and will fold.
The same thing will also happen if these companies that are to be hived off come with monopoly businesses, monopoly licenses, monopoly permits and stuff which other companies do not have. In such event they too will become noncompetitive.
The whole idea of the NEP was to make people more competitive so that they will not need endless 'easy money' which is actually a curse.
This is a good idea. Let the highest bumiputra bidder get the company (make sure they pay cash and on time - no hutang). And let them survive in the market place without the crutches and the easy money. This is a good start. I hope this will develop into a trend. It is good for the entire country.
9 comments:
Good concept but the outcome seems predictable. For the Daging type of companies, this is out of reach for the man on the street as it is reserved for those who wear yellow and those who have the word Syed and Al in their name. Bet that the same name will appear over and over again. For the Tulang, it is up for grab for the commoners but still depending on the grease; called in open tender or otherwise does not really matter. The modus operandi still the same.
Policies are imposed to have a better relationship among business. This is great article.
LOL..another one of those scams.
Nice worded but we know that only those who are connected will get them...at fire sale price and whoever bought it will make millions
Here is a question..why sell a successful company that will bring money back to the government treasury? Or is the government trying to get rid of the company that they invested billions...and will be getting almost nothing back?
NEP is not about equals or trying to make people equals. It is the biggest joke of the town. NEP is about helping cronies and connected get richer.
Look around you...how many Malays actually is making a good living? Many end up with hand out from government and jobs that pays next to nothing.
The government is not teaching people how to fish. Instead they are using the policy to play one race over another......
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i hope this will improve bumi status in term of wealth creation but who's is in the loop- big connected bumi businessmen, the rich getting richer...
Well.. GE13 coming soon my friends and now is the good time to divest (meaning sell) the GLC controlled subsidiaries to raise money or to use these companies (if listed) to drum up prices to profit. In my kampong we call these SCHEMING to MANIPULATE...the rakyat always lose.
good idea but fear of crony capitalism, high time chances given to other capable malay/bumi businessmen, not only to their close buddy.
Proton gone full circle, from gov to petronas, to private, to khazanah ,and to private
Tuan Syed,
It looks like the elections are coming and those in power are afraid that they will lose. Therefore they are raiding the coffers before it is too late.
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