THE Malaysian Anti-Corruption Commission (MACC) has arrested nearly 800 individuals over the last five years due to corruption cases involving commercial organisations.
In an email to StarBiz, an MACC spokesperson warned that corruption in Malaysia’s commercial and business sector was becoming more alarming.
Previously, all corruption offences involving commercial entities were charged on the individuals.
However, beginning June 1, 2020, with the enforcement of Section 17A of the MACC Act, companies and their directors could be deemed personally liable if an associated person such as an employee or subcontractor is caught involved in corruption for the benefit of the commercial organisation.
Section 17A covers companies, partnerships and limited liability partnerships operating in Malaysia.
The companies and directors could defend themselves against prosecution if they have implemented “adequate procedures” such as internal guidelines or staff training within the commercial organisation.
The government had previously given a grace period of two years for businesses in Malaysia to be prepared for the enforcement of Section 17A.
“Presently, we are more focused on training our own officers on commercial offences and creating awareness on what the implication of Section 17A on business in Malaysia is.
“The onus is on the private sector to prepare their organisations in taking the necessary measures. It is, after all, more about taking into account integrity and addressing transparency vis-à-vis anti-corruption measures and procedures in their corporate governance.
“To date, there have been many engagements with government-linked companies regarding Section 17A. These are based on requests from the private sector itself,” stated the MACC spokesperson.
She added that the introduction of Section 17A was necessary to fulfil Malaysia’s obligation under Article 26 of the United Nations Convention Against Corruption (UNCAC) to establish a provision for liability of legal persons in the domestic anti-corruption framework.For context, Malaysia had already signed and ratified the UNCAC, making the requirements legally binding for Malaysia.
“Based on a survey by KPMG entitled ‘Malaysia on Fraud, Bribery and Corruption Survey 2013’, 80% of respondents said that incidents that involved bribery and corruption had increased 20% since 2010. Meanwhile, 90% believe that corporate fraud that refers to bribery and corruption is the main problem for the business sector in Malaysia.
“The survey report was indeed a compounding factor that spurred our efforts towards amending the MACC Act 2009 to include corporate liability,” said the spokesperson.