MICG: Proceed with corporate liability provisions

PETALING JAYA: The Malaysian Institute of Corporate Governance (MICG) has urged the government to go ahead with the enforcement of the corporate liability provisions in the MACC (Amendment) Act 2018.

It said the government should proceed with the planned June 1, 2020 enforcement date, despite recent proposals by certain parties to defer this.

It said the argument that companies were not ready, due to the impact of the Covid-19 pandemic, was unfounded and would be detrimental to Malaysia’s international standing in terms of the perceptions of corporate governance in the country.

“The likely negative impact on future foreign investments in the country would make recovery from the current economic downturn even more difficult,” MICG president Datuk Yusli Mohd Yusoff said in a statement yesterday.

He noted that one report presenting the case for deferment, had cited MICG’S 2019 Transparency in Corporate Reporting (TRAC) report, quoting an overall finding that only 54% of Malaysia’s top 100 listed companies had completed preparations for enforcement of the MACC (Amendment) Act.

However, he said the single statistic extracted from the TRAC report appeared to have been misconstrued.

He explained that the 2019 TRAC report was designed to establish the status of the anti-corruption practices of the country’s top 100 listed companies, based on information available in the public domain.

The benchmark used was the market capitalisation of the companies at Dec 31, 2018.

“This means the 54% readiness figure dates back 17 months, a considerably longer timeline than the six months that has elapsed since the 2019 TRAC report was launched last November,” he said.

He added that the MACC (Amendment) 2018 Act was passed and gazetted on May 4, 2018, and had come into operation on Oct 1, 2018 except for Section 4 of the Act, on corporate liability – which is slated to come into effect from June 1, 2020

He said this meant companies have had 25 months to prepare to ensure compliance with the Act.

“The loss of 10 weeks to Covid-19, should the MCO continue to the end of May 2020, is of little significance in such a timeline.

“This is a time when the boards and senior management of Malaysia’s leading companies should be standing firm as champions of business integrity and ethics, not arguing for a way out,” he said.