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Malaysia in transition

Corporate Malaysia keeps mum and hopes for stability

Companies shun politics to avoid government ire

KUALA LUMPUR -- In a country where government plays a major role in business, either through ownership or regulation, Malaysia's corporate community is keeping a low profile as campaigning for the next election heats up.

Supermax Corp., one of the country's largest rubber glove makers, showed how running afoul of the government can have nasty consequences. Stanley Thai, Supermax's founder who is appealing an insider-trading sentence, has apologized for siding with the opposition in the previous election. 

"I now sincerely seek forgiveness from [Prime Minister Najib Razak] for what I did in the last election. I truly regret it," Thai said in a news conference on Sunday that took many by surprise. 

In the 2013 election, Thai openly sided with the opposition, sharing the stage with its leaders at a rally and taking an advisory role in an opposition think tank. The following year he was charged with insider trading involving a former company that was delisted in 2009.

Last November, Thai was sentenced to five years in jail and fined 5 million ringgit ($1.28 million), an especially harsh sentence for such an offense. After Thai's apology, the company's share rose 5.38% on Monday morning trading.

Many companies are quietly hoping the current government maintains its hold on power in order to finish the infrastructure projects that are driving the economy. The ruling party Barisan Nasional, or National Front, has promised to develop the country's neglected rail and road links, many of which are under construction or in the planning stages.

Specifically, the party will push for construction of a high-speed rail line linking Kuala Lumpur and Singapore, a project estimated at 60 billion ringgit  that is being eyed by foreign and domestic companies. 

The tender process has already begun, with contracts being handed out for specific parts of the project. Utility conglomerate YTL Corp. is one of four companies that recently won a bid. The ethnic-Chinese controlled group will partner with Tabung Haji, a state-owned Muslim pilgrimage fund, to build portions of the 350km line. 

"Generally, businesses expect continuity and certainty, as any major changes to policies would affect the business environment," said Adib Zalkapli, an analyst with Singapore-based corporate advisory firm Vriens & Partners. 

The campaign for the May 9 elections gathered steam after former Prime Minister Mahathir Mohamad declared on Sunday to contest Langkawi, an island north of the Malacca Straits. The 92-year-old politician is leading the opposition Pakatan Harapan in a bid to unseat the ruling party.

As prime minister, Mahathir once tried to develop the island into a resort destination to rival Thailand's Phuket Island further north. But Langkawi's allure declined after Mahathir left office in 2003. In a rally on Sunday night on the island, Mahathir pleaded with the Malay-majority there for another chance to lead the country.

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