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Forever U-Turn Policies – Affecting Foreign Investors



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Apr 11 2007
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Bank Negara Malaysia (BNM) has its changed its decision on a condition requiring all Malaysian resident shareholders of PPB Oil Palms Bhd (PPBOP) to repatriate all dividends, profits and proceeds pursuant to Wilmar International Ltd’s voluntary offer in PPBOP. The central bank told PPBOP on April 11 that the condition that had earlier been imposed on the shareholders had been waived.

In a statement on April 11, PPBOP said according to BNM, the resident, individual or corporation with or without domestic ringgit borrowing was free to reinvest foreign currency dividends, profits and proceeds from the sale of overseas investments.
Earlier Bank Negara tried to play smart by imposing rule that says Malaysian resident shareholders of PPB Oil Palms Bhd (KLSE : PPB, stock-code : 6823), PGEO Sdn Bhd and Kuok Oils & Grains Pte Ltd (KOG), which would be acquired by Wilmar International Ltd via a share swap, must repatriate all dividends, profits and proceeds from the disposal of the Wilmar shares.
BNM’s condition raised eyebrows as it was seen to be inconsistent with its broad policy that has seen quite deliberate liberalisation moves recently of the foreign exchange administrative policies. Pursuant to the easing of capital controls, effective April 1, 2005, Malaysians were allowed to invest abroad any amount if they do not have any domestic credit facilities. Previously, anyone who wanted to take out more than RM 10,000 needed BNM’s approval.
This U-Turn is seen as an approval for Malaysian shareholders to keep their money in Singapore. Obviously the relationship between current Malaysian and Singapore government is the main glue that changes the ridiculous policy imposed earlier. Should former premier Mahathir were still in power, he’ll do anything within his iron-fist rule to punish the shareholders. But why would the Malaysian government made the earlier decision to impose only to reverse at a later stage? Does this means the whole government machineries do not work in one direction as far as major decision-making is concern? You can’t say one thing now and say another thing later. This is not the way business is conduct – what more with foreign investors who are holding billions of dollars to invest in this region (stocks investing or conventional businesses) wish to make decision fast without much time to waste with a country flooded with kid’s rules and regulations.
Who is the main person or department within Malaysia that can make such similar vital decision? Bank Negara (Central Bank), Deputy Minister of Finance, Minister of Finance (Prime Minister himself) or third person with invinsible hand giving instruction? It can’t be the Prime Minister himself who imposed the rule earlier as he was, well, busy with problems related to Proton Holdings Bhd (KLSE: PROTON, stock-code, 5304). Could it be the highest political-person from Singapore who actually expressed his dissatisfaction that pressure Malaysian premier to reverse Bank Negara’s earlier decision? How could foreign investors invest confidently in Malaysia without having to worry what the government will impose the next day? Can’t the Malaysia government ever grows-up and stand tall together with other countries who have been behaving professionally?
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Comments

Is funny how our government do things. “Malaysia boleh!”

yes boon … malaysia could be the only country that has the mentality of a small kid in global arena when comes to nation administration …

just imagine african countries progress to the level of vietnam or thailand in another 10-years … by then malaysia could be seen as what we see african countries now …

cheers
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