PETALING JAYA: Securities Commission (SC) chairman Datuk Syed Zaid Albar, in an email to board members that was sighted by StarBiz, said that towards the end of last year and the first quarter of this year, the SC observed some governance lapses in Bursa.
“This was not unnoticed by the industry which raised many queries on the manner in which Bursa was being managed, in particular, the exercise of executive powers by the non-executive chairman, ” the email said.
The email was sent to explain the reasons behind the removal of Datuk Shireen Ann Zaharah Muhiudeen as Bursa Malaysia chairman.
Syed Zaid said that in the first quarter of this year, he was called by former powers of Putrajaya to explain the SC’s position on the regulatory submission following a letter written by Shireen asking for political intervention.
He said both the SC and MOF (Finance Ministry) then received a letter from Bursa attaching political approval for the appointment of new directors on its board.
“We view such conduct as a serious breach of good corporate governance, ” he explained, adding that involving parties outside the statutory powers of MOF and the SC was pre-emption of their statutory powers.
He said several public interest directors (PIDs) have also voted to file a judicial review (JR) against the SC and MOF’s decision on the regulatory submission.
“As PIDs, they should have first and foremost put public interest and the interest of the capital market first.
“Filing of the JR would have serious repercussions on investor confidence in the capital market, its regulator and the MOF. The failure of the PIDs to give due consideration to these factors render them in our view, no longer fit and proper to be a PID, ” he said.
On March 11, the SC wrote to the board of Bursa expressing its concerns on the role of Shireen, who it felt had over-reached into executive roles.
“This compromises the checks and balance which the non-execs provide to oversee management’s decisions, ” he said.
He explained that on March 17 and April 3, the SC wrote to MOF with regards to the renewal of several Bursa board members.
“In these letters SC also highlighted its concerns to MOF with regards to the lack of fit and properness of two PIDs (including Shireen) and had proposed that she and another PID be replaced, ” he said.
At press time, Shireen has not responded for comment.
The SC last Thursday removed Shireen as non-executive chairman of Bursa Malaysia and Tan Sri Abdul Wahid Omar will assume that position starting May 1.
In a statement on Thursday, the SC said the power to appoint and remove a PID and chairman of Bursa Malaysia Bhd rests with the Minister of Finance, as provided for in the Capital Markets and Services Act 2007 (CMSA).
In exercising this power, it said, the Minister consults with the SC before arriving at his decision.
“The consultation in this instance revolved around governance issues and the current Bursa chairman’s fit and properness to continue holding the position.
“Following our consultation, we believe the Minister has decided to revoke Datuk Shireen Ann Zaharah Muhiudeen’s appointment, ” the SC said in the statement last Thursday.