Posted on 30 Jun 2009
Following are highlights of the measures announced.
1) With immediate effect, Foreign Investment Committee (FIC) guidelines covering the acquisition of equity stakes, mergers and takeovers is repealed.
FIC will no longer process share transactions nor impose equity conditions on such transaction. FIC will also no longer process property transactions, except where it involves dilution of Bumiputera or Government interests. Equity conditions for investments if any will continue to be imposed by the relevant sector regulators.
2) Listed companies will no longer be subject to equity conditions post-IPO. Upon IPO, the equity condition will be subsumed as part of the public spread requirement.
Currently, companies going for IPO will need to meet both Security Commission's (SC) public spread requirement (25per cent); and FICs Bumiputera equity requirement (30 per cent). Going forward the FIC requirement is removed and the SC, as sector regulator will continue to impose public spread requirement.
SC will now impose a Bumiputera equity requirement as part of public spread requirement (specifically 50 per cent of public spread to be offered to Bumiputera).
There will no longer be any equity condition imposed post IPO except in the case of RTO and backdoor listing.
3) Going forward, FIC will only process transactions involving dilution of Bumiputera interests (such as the sale of property by Bumiputera to non-Bumiputera) and Government interests in property. Even then, FIC approval is only required for properties above RM20 million, whether bought directly or indirectly. All other transactions will no longer require the approval of FIC.
The threshold for purchase of properties by foreigners is increased in general to RM500,000 from 250,000 at end-year.
4) Ownership in the wholesale segment of the fund management industry fully liberalized to allow 100 per cent ownership for qualified and leading fund management companies to establish operations in
Foreign ownership shareholding limits in existing stock broking companies be increased to 70 per cent from its current level of 49 per cent.
5) Ekuiti Nasional Berhad (Ekuinas) to be established with initial capital of RM500 million, eventually to be enlarged to RM10 billion fund. Ekuinas will focus its investments in high growth sectors, in line with supporting the New Economic Model Ekuinas will jointly invest with private sector, reflecting a genuine partnership and through a fully commercial approach will ensure meritocracy of participating Bumiputeras.
6) The government will require government linked companies to divest non-core assets, the consultation on this process is to start immediately. The government linked companies will be required to compete on an even playing field with other entities and the government will not aid the GLCs to the detriment of other private sector companies.
