National carmaker Proton has submitted a request for funding, Minister of International Trade and Industry, Datuk Seri Mustapa Mohamed confirmed, adding that “it is still a work in progress.”

The MITI minister was speaking to reporters after a dialogue on Malaysia and the Asean Economic Community in KL yesterday. This comes after StarBiz frontpaged a report saying that Proton is seeking up to RM3 billion to fund the development of new models, and that MITI and Petronas have declined to assist in the funding, after the national carmaker approached them last year.

Mustapa, however, added that Proton’s request was not unusual, and that companies do approach the Government for tailored incentives and that the Government will reciprocate by dangling certain carrots and benefits.

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He explained that companies in general were eligible for three types of incentives from the Government – pioneer status (which gives companies tax incentives), a research and development grant and incentives for training. “These incentives are available depending on the Government’s financial situation,” he said.

“We want to know if it fits into the country’s strategic direction. We also look at the merits of the case, the availability of funds at that point in time and we will do a thorough due diligence and cost-benefit analysis,” Mustapa explained.

Meanwhile, Proton has denied that it applied for any development fund from MITI and Petronas. The carmaker has also dismissed reports that it had committed RM3.8 billion to fund its business plans until 2017.

“Proton wishes to state that an article in one of the local English newspapers on Proton seeking development funds of RM3 billion from the ministry and Petronas is not true. The statement that Proton has committed RM3.8 billion until 2017 is also not true,” said Proton’s corporate communications head Nur Balkish Hood.


Nur Balkish explained that before the takeover by DRB-Hicom, Proton had applied for an R&D grant under the Pre-Packaged Incentive Scheme through the Malaysian Investment Development Authority (MIDA).

“When DRB-Hicom came in, we reviewed the application with MIDA and verified the R&D activities. Proton has complied with MIDA’s guidelines – the definition of R&D, eligibility of expenditure and procedures for disbursement of the grant. The MIDA team and external auditors have visited Proton to ensure that the company undertakes the R&D activities as proposed and that it complies with the technical and financial requirements,” she said.

The R&D grant under the Pre-Packaged Incentive Scheme is open to all organisations in Malaysia.