Economy minister: Anti-rent-seeking law pushed to 2027, 'Ali Baba' not yet a crime

PARLIAMENT | The government now aims to table anti-rent-seeking legislation in 2027, with Economy Minister Akmal Nasrullah Nasir acknowledging that “Ali Baba” arrangements are not defined as criminal offences.

“The challenge is that, at present, practices such as selling licences or engaging in ‘Ali Baba’ arrangements are not defined as criminal offences,” Akmal told the Dewan Rakyat during Question Time today.

The term “Ali Baba” has traditionally referred to arrangements where a party entitled to a contract, licence or preferential opportunity acts as a front before transferring the actual business to another party in return for a fee or share of the profits.

Its usage has since broadened to include proxy arrangements such as locals renting licences or premises to foreigners.

“That is why there is a need to assess an anti-rent-seeking law that would allow such practices to be defined as offences,” said Akmal (above) in response to Syahredzan Johan (Harapan-Bangi).

The DAP MP had requested an update on the proposed law which the 13th Malaysia Plan targeted for tabling this year.

“Based on current planning, the Economy Ministry intends for either new legislation or amendments to existing laws related to anti-rent-seeking to be tabled in Parliament in 2027,” Akmal explained.

In November 2024, the Economy Ministry called for consultants to study rent-seeking practices and whether a new Anti-Rent-Seeking Act or amendments to existing laws were needed.

Three years later, in July this year, the ministry reportedly said it was still refining the proposed framework.

‘Penalties may cover middlepersons’

In a supplementary question, Syahredzan (below) noted that such arrangements could involve contracts meant for bumiputera being passed to non-bumiputera parties, or local authority licences meant for citizens being handed to non-citizens.

He asked whether penalties would extend beyond the original licence or contract holder to recipients and middlepersons who profit from the arrangement.

In response, Akmal said, “At the Economy Ministry, we are looking at options to ensure that the scope is not limited only to the giver or recipient.

“That is why the approach is geared more towards deterrence, to prevent such practices from continuing to flourish in the country.”

Possible fines or imprisonment, however, would only be determined once the framework is finalised.

Akmal also noted the problem had evolved beyond the traditional rent-seeking model.

“Today it is no longer just Ali Baba. There are also increasingly obvious ‘Baba-Baba’ arrangements that we need to examine more closely,” he said, alluding to additional layers of beneficiaries beyond an original recipient and a second person involved.

‘Existing corruption laws still apply’

Salamiah Nor (PN-Temerloh) later asked how the proposed law would address corruption involving civil servants and politicians.

Akmal, however, said existing laws could already address corrupt conduct.

“If such elements fall under existing laws, then the matter should be reported, or action should be taken under the existing legal framework,” he said.

The gap, he added, arises where the rent-seeking arrangement itself is consensual and does not amount to a criminal offence.

“Even if such arrangements may be consensual […] these practices will weaken capacity and competition.

“We do not merely want to give our citizens opportunities to do business and compete, only for those opportunities to fail to build genuine capability ultimately,” he said.

Prime Minister Anwar Ibrahim first announced in July 2023 that the government was drafting an anti-Ali Baba policy, estimating losses from rent-seeking at around one percent of gross domestic product.

He said such practices involved government procurement, licences, permits and quotas, as well as subsidies and grants.

Separately, Parliament passed the Government Procurement Bill in 2025 with provisions aimed at stopping unauthorised transfers or subcontracting of government contracts.

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