Gerakan Youth chief Mah Siew Keong said legal firms in small towns would be badly affected by Malayan Banking Bhd's (Maybank) new policy in selecting its panel of lawyers.

"In many smaller towns, a lot of lawyers are a one-man show. If the 50 percent bumiputera equity (policy) is enforced, then it means all those lawyers operating alone will not be allowed to do any work for the bank," he said in a statement today.

His comments come in the wake of growing criticism against Maybank for its policy, which is being deemed discriminatory and anti-competition.

Maybank - controlled by government-fund manager Permodalan Nasional Bhd - has sent out letters requiring firms on its panel of solicitors to have a minimum of three partners, at least one of whom must be a Malay with a minimum stake of 50 percent in the firm.

The policy is supposed to take effect on July 1 for new legal firms joining the bank's panel, while existing panels would have a year to comply.

Bar Council chairperson Ambiga Sreenevasan has slammed the policy as "totally discriminatory", while the Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM) described the move as retrogressive in a New Straits Times report today.

The DAP youth wing has threatened to boycott the bank if it does not withdraw the decision within two weeks.

Don't stifle competition

Mah said efficiency and performance of lawyers are paramount in serving clients, not the ethnic composition of the partners.

"The impact of globalisation and trade liberalisation in the world economy underscores the need for Malaysian companies to become more resilient and competitive.

"Being the largest banking group in Malaysia, Maybank should adhere to the free market mechanism and take a flexible approach to encourage fair and equal competition rather than impose racial orientated policies which will have a major impact on many legal firms."

He also called upon the government to establish guidelines similar to those for the Iskandar Development Region in Johor, in which certain companies would be exempted from the 30 percent bumiputera-ownership requirement.

Maybank has said that it would take a 'flexible approach' and that it did not intend to call for its existing panel of solicitors to restructure their ownership.

"We would like to assure all parties concerned that the bank has taken note of the issues highlighted and that the necessary review will be undertaken with due consideration to the feedback raised," it said in a statement published by The Sun.

"Rest assured that efficiency and performances of lawyers as well as their ability to provide the highest standards of service to the bank and its customer have always been a core requirement for appointment onto the bank's panel of solicitors."