PETALING JAYA: The SME Association of Malaysia warns that the number of companies forced to close shop could rise further by the end of the year, following a deputy minister’s disclosure in the Dewan Rakyat that over 4,000 businesses had shut down since April.
Its president Michael Kang told FMT that the actual number of business casualties from the Covid-19 pandemic would only be known later this year as it takes anywhere from three to six months to wind up a company.
“I think the figure is not accurate,” he said, adding that it might also include business closures initiated last year.
“A lot of companies which faced difficulties due to the Covid-19 pandemic would not have immediately filed for closure as they would have needed to get their documents in order and make sure they had no debts before winding up.”
Adding that it had only been several months since the outbreak, he said many still believed “the worst is yet to come”.
Deputy Domestic Trade and Consumer Affairs Minister Rosol Wahid said 4,542 companies had shut down since April although 82,555 new companies also registered with the Companies Commission of Malaysia (SSM) during the same period.
However, the Malaysian Employers Federation (MEF) said the number of new registrations did not necessarily translate into jobs.
“The deputy minister said more than 80,000 new businesses were registered but I don’t know whether they are really doing business or just registered as one,” MEF executive director Shamsuddin Bardan told FMT.
“Having these new businesses registered doesn’t give comfort to those who are seeking jobs,” added Shamsuddin, who previously predicted that over two million including fresh graduates and those who became unemployed before March would be out of a job due to the pandemic.
Majlis Tindakan Ekonomi Melayu chief executive Ahmad Yazid Othman agreed that not all businesses registered with SSM would necessarily be operational.
While he did not question the integrity of SSM’s data, he said a more holistic approach was needed to accurately gauge the health of Malaysian businesses.
“Indicators of new and closing (companies) are not sufficient to determine if things are better or worse,” he said.
“What is more important is to look at the companies that are already here and see how they are surviving.”