Shake-up in government funds | Digital Malaysia
PETALING JAYA: The government is likely to reorganise the various funds that were set up to venture into businesses related to the new economy, following their below par performance.
This came about after it was discovered that some of the funds were not able to pay back the amounts due to the government, even after many years of restructuring efforts.
For instance, the oldest of the funds, Malaysia Venture Capital Management Bhd (Mavcap), is unable to pay the government an outstanding of RM112.7mil that is due from the allocation made during the 8th Malaysia Plan, which ran from 2001 to 2005.
Another RM314.5mil from the 9th Malaysia Plan loan is due in January next year, of which Mavcap is unable to meet.
According to a source, Mavcap had proposed to repay the RM112.7mil using the balance RM163.6mil from the 9th Malaysia Plan loan account.
“Following the full payment of the 8th Malaysia Plan loan, the shortfall was required to be recovered through obtaining a lump sum of RM55mil from the 11th Malaysia Plan allocation.
“In addition, Mavcap intended to apply to the Ministry of Finance for a new allocation of RM100mil under the 2019 Budget measures,” he said.
Mavcap was first established in 2001, following the rise of Silicon Valley as a hub for technology innovation and development.
The fund was mandated with the objective of developing Malaysia’s venture capital ecosystem in support of start-ups and entrepreneurs.
Mavcap was provided with a RM450mil loan under the 8th Malaysia Plan, which was due to be paid back to the government in 2011.
Since its inception, Mavcap has invested in a number of successful companies such as Kelington Group, Qualitas Medical Group Ltd, LNG Resources Bhd , Grab, Jobstreet Corp, and Rev Asia.
Sources said that Mavcap was only one of the many funds where millions were allocated.
There are many others that are unable to meet their obligations and they were all previously under Ministry of Finance Inc (MoF).
Towards this end, the government has now placed many of the funds under the Energy, Science, Technology, Environment and Climate Change Ministry, led by Yeo Bee Yin.
To name a few, these funds are Mavcap, Malaysia Debt Ventures Bhd (MDV), Malaysia Industry-Government Group for High Technology (Might), Cradle Fund Sdn Bhd and Malaysian Green Technology Corp (MGTC).
“Malaysian Global Innovation & Creativity Centre (MaGIC) is one of the funds under review to gauge its relevance,” a source said.
MaGIC was established to enable an entrepreneurial ecosystem to accelerate the formation and growth of start-ups.
In June, Finance Minister Lim Guan Eng was quoted as saying that MaGIC had a role to play in the Malaysian economy as it seeks out future productivity centres to help the country.
Productivity centres is where new sources of revenue can be found, capitalising on the creativity and innovation from the nation’s talent pool.
Meanwhile, it was reported that since its inception in 2002, MDV had disbursed more than RM11bil in financing to about 700 technology companies as of March this year.
Cradle Fund, established to fund potential and high-calibre tech start-ups through its Cradle Investment Programme, has received about RM150mil in grants, a quarter of which was used for operating expenditure, with the rest for investment.