APs a ‘cash cow’ to the holders

PETALING JAYA: It is an open secret that the Open Approved Permits (APs) to import foreign vehicles into the country are “cash cows” to the permit holders.
The lack of transparency and accountability on how the AP holders are selected has led to a system that is open to abuse.
The controversy related to the APs, which were initially issued in the 1970s to encourage bumiputra participation in the used-car industry, exploded in 2005 when it was revealed that a handful of individuals monopolised the AP business.
It was reported that among the few “AP Kings” then were the late Tan Sri SM Nasimuddin SM Amin, Tan Sri Syed Azman Syed Ibrahim and Datuk Seri Mohd Haniff Abdul Aziz.
They collectively received 33,218 APs, which was about 50.1% of a total of 66,277 for 2004 and 28,283 APs, or 41% of 68,330 for 2005 alone, according to a list released by the government.
According to the documents, the four AP Kings were earning RM1 billion a year just from the sale of the APs.
There are two types of APs issued by the Ministry of International Trade and Industry (Miti). One are Franchise APs that are given out to franchise holders of car brands registered with Miti and the other are Open APs exclusively for bumiputras only to import cars of any brand of vehicles to sell in the Malaysian market.
However, the AP system introduced to help bumiputra entrepreneurs in the automotive business has backfired, with some trading in the licences for a quick profit instead.
These Open APs are deemed to be highly lucrative and can be resold for up to RM50,000 per permit depending on the car model.
The total number of APs issued each year is supposed to be 10% of the number of local-assembled cars in the preceding year and 60% of the APs are given to bumiputra Open AP holders while 40% are given to franchise holders.
Latest figures provided to SunBiz by Miti showed that there are currently 100 companies holding Open APs for cars, and 76 companies for motorcycles. Under the Franchise AP holder category, there are 22 companies for cars and 15 companies for motorcycles.
The 2009 NAP specified that open APs would be terminated by Dec 31, 2015, and franchised APs by Dec 31, 2020.
Subsequently, at the announcement of NAP 2014, it was stated that the government would appoint a company to do an in-depth study on the impact of the termination of Open APs on bumiputra participation in the automotive industry. Almost two years later, the government decided to maintain the system with certain improvements, which are yet to be announced. – by Rupinder Singh