Public Corporation or Enterprise

Reasons for Growth of Public Corporations

1. To promote economic regeneration and development of the country. 2. To improve socio-economic well-being 3. To maintain public control over the basic resources of the country and to reduce concentric of wealth and means of production in a few hands. 4. To help Bumiputras to achieve the objective of 30% equity public companies in commercial and industrial activities. 5. Lack of financial and managerial capacity in private entrepreneurs to undertake huge projects.

State Five Examples of Public Corporation in Malaysia

1. Majlis Amanah Rakyat (MARA) i. It was established in 1966 ii. It guides, trains and assist Bumiputras to participate actively in commercial and industrial activities iii. Objective: To create viable business projects and eventually to transfer the share equity to Bumiputras. 2. Urban Development Authority (UDA) i. It was a statutory corporation set up in 1971. ii. Objective: To help Bumiputras to manage and own at least 30% of commercial and industrial activities in urban areas within 20 years. 3. Perbadanan Nasional Berhad (PERNAS) i. It was established in 1969. ii. It is a public limited company registered under the Companies Act as a joint enterprise of the Government of Malaysia and a number of other government bodies. iii. Objective: To further the financial and managerial participation of the indigenous people of the industrial, commercial and financial development.

4. Federal Land Development Authority (FELDA) i. It was created in 1 July 1956 ii. Objective: To provide and assist the investigation, formulation and carrying out of projects for the development and settlement of land within the Federation in conjunction with the State Government. 5. Malaysian Industrial Development Finance (MIDF) i. It was created 30 March 1960 ii. Objective: To promote the development of the nation's industrial sector through the provision of financing for manufacturing-based small and medium enterprises. iii. Over the years, MIDF has developed into a diversified group with substantial investment in the financial services industry and the industrial property sector.

Judicial Control Over Public Corporation

1. Court exercise control over public enterprise by doctrine of ultra vires meaning that a company must not act outside its object clause in the memorandum or the parent statue as the case may be. i. However in practice, the judicial control is not effective as the objects clause is worded very broadly and in general terms. 2. The courts can issue a mandatory order (mandamus), certiorari, injunction or declaration against both a statutory or non-statutory corporation. 3. Corporation is liable for any tortious act of its servant or agents in accordance with the ordinary principles of law of agency and vicarious liability. 4. For locus standi in Malaysia, any person not connected in some way with the concerned party may be able to bring able to bring an action against the corporation from enjoin it from doing anything against the law.

State Legal Characteristics or Features of Public Corporation

1. It has a legal personality of its own which is separate and distinct from the shareholders. 2. The corporation is its own master and legally answerable as fully as any other person. 3. A corporation is a public authority and its purposes are public purposes, but it is not a government department, nor does its powers fall within the province of the government, nor is it regarded as an agent of the government, any more than a company is an agent of the shareholders. i. Mere exercise by control over a corporation by a Minister does not make the corporation a servant or agent of the Crown. 4. It property is not a government property. i. Public properties can hold or have property registered on its own capacity. 5. It does not enjoy any of the immunities or privileges available to the government. 6. It servants are not civil servant and it is bound by the law as much as any other person. 7. The public corporations cannot enter into a contract which may be void as being against public policy.