SC: Rise in corporate misconduct exposure result of enhanced vigilance

KUALA LUMPUR: The recent rise in the number of cases involving corporate misconduct does not imply that Malaysia has a negative stock market investing environment.

Rather it should be viewed as a result of enhanced regulation on the part of market regulators and the greater awareness of the need for corporate governance, said Securities Commission (SC) chairman Tan Sri Zarinah Anwar.

“We must take note that there are thousands of companies listed on Bursa Malaysia but only a handful had been involved in corporate misconduct. So, it is unfair to categorise our stock market as one that has a lot of corporate misconduct or misbehaviour,” she told reporters after delivering a keynote address at the 4th International Islamic Capital Market Forum yesterday.

“Of course, we’re not happy with the situation because corporate misconduct is not the right characteristic for the market. But as long as those cases are appropriately dealt with, it should not be an alarming issue,” she said.

According to Zarinah, since the introduction of whistle-blowing provisions several years ago, the SC had received around 40 reports about corporate misconduct from various parties, and this should be regarded as a good development for the market as it signalled an emerging culture of public accountability and integrity.

She also said that the recent launch of the new five-year blueprint on corporate governance for Malaysia from 2010-2015 was a reflection of SC’s aim to continually improve the regulatory requirements and enhance corporate governance standards in the country.

Zarinah said that while the highest level of conduct must prevail in the market, she stressed that one should not rely entirely on regulators to stem any mischievous activities by corporate citizens.

“There must be a greater level of self-discipline among all market players. Self-discipline is an extremely important element to ensure confidence in the market,” she said.

On SC’s ongoing investigation into the case of Kenmark Industrial Co (M) Bhd, Zarinah explained that the commission had to investigate and prosecute if there were a breach of law.

“Naturally, we will have to depend on evidence from relevant witnesses, in which case, involves members of the media,” she said.

The SC has so far interviewed 19 witnesses, four of whom are journalists, for the case involving Kenmark.

Zarinah said the procedures employed on taking statements from all witnesses for the case were similar and done in accordance with the law, and maintained that there was no intimidation, harassment or pressure put on any witnesses.

It’s not an interrogation process, Zarinah said, but merely a statement-taking process, involving questions and answers.

“Over the years, we have had excellent co-operation and assistance from journalists and we are grateful for that,” she said, and emphasised the importance of mutual assistance between witnesses and regulators to effectively protect public interest.

“We are all doing a public service here, working for the interest of the public,” she said.

“It is the statutory role of the SC to protect investors, and we need to ensure that the market is fair, orderly and transparent so that we can maintain a high confidence level in our stock market,” Zarinah said. For latest Securities Commission reports click here

For latest Securities Commission reports click here

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