Association: Covid-19 Act must be fair to all

PETALING JAYA: The Malaysia Shopping Malls Association says the call for a Covid-19 Act, “purportedly” to protect businesses and jobs, must have adequate provisions to ensure it is fair and adequate, and must ensure protection is only applicable to genuine situations.

Any protection should be only applicable if enforcing the contract will cause the weaker party into insolvency or bankruptcy, it said in a statement. There must be no abuse.

The statement said this was “a very delicate proposal as it is a call for the government to introduce a law to intervene in, essentially, a private contract between two contracting parties”.

Any intervention must be based on equity and be a “win-win” to both the contracting parties, the statement said.

The association said the proposals articulated by a member of the legal fraternity, crisis/insolvency expert and audit firm in

Starbiz on companies needing more relief were one-sided and self-serving, with no consideration of the contractual rights, financial position and impact of the other contracting party.

The association said it was “apprehensive” that the proposal for a Covid-19 Act, as promulgated by them, will be carte blanche to get out of their contractual obligations without condition nor reasonableness.

Among the concerns were tenants withholding rent as they were protected from eviction and suppliers delaying supplies if they had a better-priced contract to fulfil.

“Otherwise, under the guise of protection from the Covid-19 Act, it will encourage frustrating the contract willy-nilly to the detriment of the other party,” the statement said.

Any envisaged Covid-19 Protection Act must protect and be equitable to both parties, and only applicable in extreme insolvency/ bankruptcy situations.

The statement said assistance had been given in past crises on a “shared-burden” basis, including giving rent rebates, deferment of rent and additional promotional expenses.

Assistance was structured and tailored for different tenants and categories of business according to needs and circumstance.

A blanket “one-size-fits-all’ approach is not practical nor will it deliver maximum effect and benefits.

On a separate matter, the association said the government’s initiative to provide tax relief for a 30% threshold rental reductions only for SME tenants had excluded most tenants.

“We appeal for these two conditions to be waived.

“We take this opportunity to clarify to the public that for every RM100 foregone rent, the tax relief is merely RM14 and is a disproportionate burden on the landlord,” the association said.