Thursday, November 02, 2006

Bumi equity surpassed 30% TEN YEARS ago

This one is sure to hit the roof. So shortly after the political-racial controversy on the Asli report, another report has emerged to support Asli’s contention that bumi equity had surpassed the magic 30%.

Malaysiakini reported that the ground-breaking research was published as a report entitled ‘Bumiputeras in the corporate sector: Three decades of performance 1970-2000'. Even more startling, it was published four years ago!

Mind you, four years ago! Why did most of us miss that? Don't tell me that the government wasn't aware?

Let’s just remind ourselves of what the Asli controversy had been before we discussed the second (or rather the first, if it was published four years ago) report.

Recently a local think-tank, the Asian Strategy and Leadership Institute (Asli)’s Centre for Public Policy Studies, published a study report that estimated the bumi equity ownership at about 45% - more than double of the government figure of 18.9%.

Asli’s finding threw a spanner into the basis of the government’s 9th Malaysian Plan (9MP). The government has announced in the 9MP that the NEP’s racially-based measures will remain for another 15 years until 2020 based on its argument that bumi equity has only reached 18.9%.

UMNO ministers, including the PM, and a few Malay academics’ responses to Asli's finding were swift and fierce. They denounced it without even bothering to question or assess its methodology, which most economic experts said was correct and far superior to that used by the dodgy PM's department's Economic Planning Unit.

Asli’s director was coincidentally but unfortunately a Chinese though the controversial report was researched by a multi-ethnic team. The director, top academician Dr Lim Teck Ghee, was so upset by the craven cowardice of its president in not backing the think-tank’s report that he (the director) resigned out of honour. The public was also told by the government not to question the credibility of the figures provided by the authorities.

The newly emerged but 4-year old university research paper was published by Dr M Fazilah in 2002. In her findings she averred that in 1988, bumiputera corporate equity ownership was way below the NEP target at 12%, of which 11% was under bumiputera corporate equity ownership while 1% was under individual bumiputera share ownership.

She wrote: “Nevertheless, the percentage of corporate equity owned by bumiputeras fluctuated between 16 percent in 1999 to 22 percent in 1995 and reached the NEP target only in 1997.”

“… reached the NEP target only in 1997.” That’s TEN YEARS AGO!!!

Dr Fazilah is also the head of the finance and banking department at Malaysia’s premier UM’s business and accountancy faculty. Her research was commissioned and published by UM’s independent research unit, the Centre for Economic Development and Ethnic Relations.

Fazilah also found that bumiputera corporate ownership enjoyed the highest annualised growth rate - 27.9% - between 1988 and 1997 compared to that of non-bumiputeras.

Can the government or its EPU officials dare say it didn't know of this? So it has been lying through its teeth with the 18.9% nonsense, which of course we knew all along, but nonetheless it's still a lie!

Fazilah declined to comment on her research because she has been gagged by the university’s ‘Akujanji’ (pledge of good conduct), which automatically barred her from making media statements without prior approval from the university’s authority.

Now one of the government’s argument against the Asli’s report was that the calculation of shares had been based on market value when to them (the government) it ought to be par value, though everyone who has some sense of economic modelling knows that market value was more correct.

In fact, many academicians also questioned the methodology used in the government’s computation that had been based on the lower par value instead of market value of company shares. The latter is generally considered as a more accurate measure of wealth.

The most interesting aspect of Dr Fazilah’s research findings on the bumi equity study was based on the par value of the KLSE companies, not their market value.

Well, what can we say – bumi equity surpassed the 30% mark TEN YEARS AGO at PAR VALUE!

(1) Bumi's Equity is already 45%
(2) 30% bumi equity insufficient - additional condition required
(3) More verdict on bumi equity issue
(4) A Study in Sarcasm
(5) Bumi Equity - a Never Ending Story
(6) UMNO bully boy threatened Asli
(7) Mouse Rempit told Asli not to be racist!
(8) AAB gave stern warning to Lim Keng Yaik


  1. This time, would the UM Vice Chancellor has to come out to 'apologise' and to 'retract' the Report - like Mukhriz??

  2. Don't you know our share is 60 %? What is the fuss about?