Au Foong Yee: It has been suggested that the Foreign Investment Committee
has outlived its purpose, and that by not making public reasons for rejecting any property
purchase, it further deters interest from foreigners. (The FIC had, on separate occasions,
rejected the sale of Pernas International Building and Menara Lion before granting
approval for both transactions.) Ho: Is there also a need to reduce the
layers of bureaucracy because deals need to be concluded quickly?
Gerard: In 2002, there are
going to be open markets everywhere. The whole world is changing.
Suleiman: The FIC was
introduced to safeguard property transfers to foreigners. All we need are fixed guidelines
on what foreigners can buy. Why do you need approval?
Au: There was no foreign
element in the Pernas International Building deal. Both parties involved are Malaysians.
Pereira: Since no reason was
given for the initial rejection of the Pernas International Building sale, the speculation
was that the FIC could have wanted to avoid a low price benchmark through the sale.
Liew: You need FIC approval
to buy a shoplot.
Pereira: As an individual, if
you want to buy property costing more than RM5 million, you will have to form a company
with more than RM200,000 in paid-up. Then there is a bumiputera quota. If you’re
buying an RM8 million house in Kenny Hills to stay in, are you going to give somebody 30
per cent of the house?
Liew (referring to Menara
Lion deal): If Citibank wants to own a building and spend money in this country, let them
be.
Pereira: And they are paying
top prices — not what the Pernas International Building went for.
Suleiman: We can protect
certain areas like foreign buying of certain infrastructure, certain utilities. A
commercial building, to me, is not strategic — it will change hands. Next time,
Malaysians will buy it back (from the foreigners).
Liew: Our government always
interfered at the wrong time.
Pereira: At the peak,
they’ll say to foreigners, “Don’t buy.” But when prices come down,
they’ll say, “Please come and buy.” So the foreigners have the upper hand.
Ho: There has to be a
major mind shift. Market forces should be allowed to work.
Radzuan: Unless there are
very good reasons for government intervention, like when it involves heritage buildings or
if shareholders’ interests are not protected, market forces will work on their own.
After all, the guidelines have been defined.
Pereira: There are many
foreign companies, foreign trust funds, insurance companies, pension funds which may wish
to buy our buildings but they are deterred by the FIC regulation on bumiputera quota.
Liew: Pension funds’
charter doesn’t allow that.
Suleiman: Property is
probably one of the biggest and most important components of our economy. It affects the
prospects of business. There is a policy on the property industry but it is implemented on
a piecemeal basis and is also fragmented. Once in a while, there is a new policy. That
includes the approval process. If only we could have a more comprehensive and definable
policy, that would be better for the industry.
Pereira: If you want to clear
a lot of commercial space, you have to let the foreigners come in because, to them, it is
cheap and good value.
