DEREGULATION OF INVESTMENT GUIDELINES A FAIR POLICY FOR ALL, SAYS PM NAJIB

KUALA LUMPUR, June 30 (Bernama) -- The comprehensive deregulation of
investment guidelines announced Tuesday is a fair policy for all, including
foreign investors, Prime Minister Najib Razak said.

"It is a fair new policy guideline, which is designed to be a win-win
situation for global investors and at the same time address the need for new
effective instrument for Bumiputera participation," he said.

Hence, there would not be a "political backlash", said Najib, who is also
finance minister, when asked if the new guidelines would have a political
backlash at a press conference at Invest Malaysia 2009 here Tuesday.

"No one must feel marginalised, no ethnic group is marginalised and no
ethnic group is disincentified. It is a tricky balancing act but doable," he
said.

Among others, he announced that with immediate effect, the Foreign
Investment Committee (FIC) guidelines covering the acquisition of equity stakes,
mergers and takeovers would be repealed without any new guideline in place.

"The FIC will no longer process any share transactions nor impose equity
conditions on them," he said.

Currently, he said, companies seeking listings were required to satisfy the
public shareholding spread requirement of 25 percent based on Malaysia
Exchange’s listing rules and also the Bumiputera (son of soil) equity condition
based on FIC guidelines.

Going forward, he said, the public spread requirement would remain and in
addition, the Securities Commission would introduce a new guideline which would
require companies seeking listing to offer 50 percent of the 25 percent public
shareholding spread to Bumiputera investors.

"The Bumiputera equity condition therefore becomes subsumed within the
public spread requirement.

"One of the pains of the FIC and the old model is that some people feel
disincentivised in this country and it has been a complaint in the past by
foreign investors. And now I hope they will talk about we being more friendly.
Insya Allah (God Willing)," he said.

Asked if the new measures would eliminate the Ali Babas, he said: "I don't
think you can eliminate sleeping partners overnight ... I mean in businesses.
But, I think it will reduce very substantially.

"At least, we are helping those who are helping themselves," he said.

Najib said in the past, Bumiputeras got the shares and straight away they
would sell them.

"At the end of the day the sell-down is enormous. We did our research. Very
little shares are still left. So, the old model is not sustainable," he said.

Of the RM54 billion (US$1=RM3.52) in shares allocated, only RM2 billion
worth of shares were left in the hands of Bumiputeras, he said.

He said the total Bumiputera equity was only 19.4 percent, far from the
targeted 30 percent 19 years ago.

-- BERNAMA