MACC net cast wide

also extends to foreign companies carrying on a business or part of a business in Malaysia. By including the term “part of a business in Malaysia”, I presume that this is meant to be wider than just the foreign companies who register themselves under the Companies Act. Third, the section applies to a Malaysian partnership or Malaysian Limited Liability Partnership, whether they carry on business in Malaysia or elsewhere.

Person associated with commercial organisations Next, the categories of the associated person (who carried out the corrupt act) are also wide. The list of individuals falling within the term “person associated with a commercial organisation”: (i) Director; (ii) Partner; (iii) Employee; and (iv) A person who performs services for or on behalf of the commercial organisation.

This last category will be intentionally kept wide and subject to interpretation. The bill makes clear that the question whether a person who performs services for or on behalf will be determined based on all relevant circumstances.

Deemed offence by directors and management Significantly, once the offence is committed by the commercial organisation, the law will deem that certain persons have also committed that offence. These persons are: (i) The director, controller, officer (and this would include an employee) or partner; or

(ii) A person who is concerned in the management of its affairs.

The onus now shifts on the individual who is deemed to have committed the offence to prove two elements to defend himself:

a. The offence was committed without his consent; and

b. He exercised due diligence to prevent the commission of the offence, taking into account the nature of his function in that capacity and to the circumstances.

It will therefore be critical for directors and management to have systems in place to demonstrate due diligence in preventing such corrupt offences.

The crucial defence Adequate procedures – where a commercial organisation is charged with this corporate offence, it is an absolute defence to show that the organisation had adequate procedures in place to prevent such associated persons from carrying out the corrupt conduct.

The UK Bribery Act also allow this defence of adequate procedures. It will be critical for Malaysian companies and foreign companies doing business in Malaysia to have in place a system of adequate procedures. This is to safeguard the company, its directors and officers.

The penalties The penalties for this corporate offence are high. Upon conviction, it exposes the commercial organisation, and the directors, officers and management to:

(i) A maximum fine of 10 times the sum of gratification involved, or RM1 million, whichever is higher; (ii) A maximum jail term of 20 years; or (iii) Both penalties of the fine and jail term.

The writer is a practising lawyer and an advocacy trainer with the Malaysian Bar.