It’s time to end ‘Ali Baba’ culture

PETALING JAYA: Instead of being honest brokers running their own business, some of them have turned to the “Ali Baba” way of making money – which is when business licences and permits are abused and “rented out” to those who are not eligible, such as foreigners.

Mohd, 56, who spoke on condition of anonymity, said he rented out his premises and sundry shop to a foreigner who was willing to run the business.

ALSO READ: Locals prefer the easy way out due to cost factors

“The licence is issued in my name, so it is just on paper,” he said, referring to the convenience store that is operated by a Pakistani.

Mohd said he had received a “good amount” for it and the person who was running the business wanted to import things from South Asia to cater to those from that region living in Malaysia.

“I don’t have to think about running a business. They have the acumen and manpower to do it. And they do not need big profit margins like locals do as they will be sending the money to their country.

“The ringgit is still bigger in value compared to their currency, and as long as they pay me for this, why not?” he added.

The “Ali Baba” practice has long festered in the corporate sector as well, in the form of non-bumiputra businesses using bumiputra owners and directors as a front to enjoy certain incentives.

A person, who had acted as a nominee director for a non-bumiputra company, said she was paid a monthly sum for use of her name.

“My father’s friend wanted to set up a company but he needed a bumiputra name as the owner and director. While I am listed as such on paper, I have nothing to do with the company.

“In turn, I get a couple of thousand monthly in payment,” she said, requesting her identity not be revealed.

A car dealer, who also spoke on condition of anonymity, said while he held the approved permit (AP) to import cars years ago, his business did not take off.

“I was in the red and it was not working out. I found a non-bumi businessman who was able to generate sales, but he needed an AP. He was willing to pay for it,” he said.

On Monday, Economy Minister Rafizi Ramli said the government is considering drafting a law against the “Ali Baba” business practice.

This is also to take action against Malaysians who illegally rent out their licences to foreign workers.

Federal Territories Malay Hawkers and Small Traders Association president Datuk Mohamad Abdullah said such a proposed law would be timely and would mitigate the rent-seeking problem in the short and long term.

“If people continue to sublet (to foreigners), how can the rakyat earn a living? Business spaces are limited – there is a quota for business licences and there is strong competition.

“For example, we have 300 lots and imagine all or half of the local traders sublet their lots to foreigners. That would be a problem,” he said.

“This in turn will affect the licences given to locals.”

Mohamad said this practice had also resulted in an outflow of the ringgit to the home countries of the foreigners running these businesses.

“We are worried about the influx of foreigners running business (without proper licences),” he said, adding that a law is needed to put an end to this.

He also said those guilty of such deeds should be blacklisted from obtaining new business licences in the future and their businesses should be confiscated and given to citizens who are eligible.However, Malaysian Federation of Hawkers and Petty Traders Association president Datuk Seri Rosli Sulaiman said there is no need for new laws and instead, enforcement of existing laws should be stepped up.

He said authorities should also take action against foreigners who had overstayed without proper permits.

“They should not be allowed to be involved in business.

“We cannot just blame Malaysians for renting out their businesses to foreigners. The government must first take action against foreigners and tourists who have overstayed,” he added.

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Ali Baba , Rent-Seeking , Foreigners


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