Earlier this week, the matter of open approved permits (AP) surfaced again when it was reported that Putrajaya had allegedly approved 38 new AP holders, the contention being that these new holders were not in the car business but merely looking to sell their permits to established AP holders, which have had their regular annual AP quotas reduced to accommodate the provision to the new AP holders.

The ministry of international trade and industry (MITI) – via its deputy minister Ong Kian Ming – said it would issue a statement regarding the issue, and did so yesterday. In the statement, it said that the new open AP policy had been implemented with effect from January 1.

It said that under the new policy, there is no limit to the overall number of APs to be released throughout the year and companies may apply for additional APs based on their sales performance.

The ministry said nearly 300 applications were received by it when an offer for application to become an open AP company was made from May 23 to June 21 in 2016. It said that after an evaluation process, including an audit by a qualified independent auditor, 164 companies qualified to become AP holders, and of these 128 are existing companies while 36 are new.

“Conditions that needed to be fulfilled, among others are, the company must be 100% owned by Bumiputeras, including in key management posts, and it has at least two years of experience in selling and distributing motor vehicles, and a strong financial position,” the ministry said.

It said that at the moment, most of the new companies are still not fully in operation as they need to fulfil some technical requirements and be prepared for business operational matters. It added that the details on current qualification as an open AP company as well as the latest list of open AP holders have been published on its portal.

The ministry said the implementation of the new open AP policy is in line with the government’s decision in 2015 to continue the policy with some improvements, including providing the opportunity to new Bumiputera entrepreneurs to participate in the industry. It added that the new policy, which should have been implemented in January 2017, was postponed for almost two years due to uncertainties in the domestic automotive market.

The companies are subjected to the conditions and rules imposed by MITI, which will continuously monitor and audit them. Under the new policy, the ministry said it will take decisive measures if there is a breach of any of the conditions.

These include withdrawing or suspending the allocated and approved APs, blacklisting the companies (including every shareholder and board member of the company) from submitting any future application on open APs, and taking a legal action against the company. The ministry stated that last year, it blacklisted nine existing companies for offenses and for not complying with the conditions.