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In its effort to curb corruption in Malaysia, the Government has announced that the main legislation that regulates bribery and corruption in Malaysia will be amended to include provisions for corporate liability. According to the website of NKRA (National Key Result Areas) Against Corruption, the Malaysian Anti-Corruption Commission Act ("MACCA") would be amended to incorporate legal provisions for corporate liability based on the United Kingdom's Bribery Act 2010 ("Corporate Liability Provision"). As it stands, the current law is unclear as to whether the term "person" who can be made liable for corrupt practices includes corporate bodies, as only individuals / employees are charged for offences under the law. The Corporate Liability Provision, when it comes into operation, will also make companies liable for the corrupt practices committed by its employees.
The Corporate Liability Provision, when enacted, will bring Malaysia's anti-bribery laws in line with that of the UK and the United States of America. Both the UK's Bribery Act 2010 and the US's Foreign Corrupt Practices Act 1977 have extra-territorial jurisdiction, which hold their multinational companies operating abroad liable for act of corruption committed not only by their employees but also the employees of their overseas subsidiaries. This represents an important step in making the private sector in Malaysia more accountable and transparent by making companies accountable for the action of their employees.
We wrote an article on this subject, titled "Lifting the Veil on Corporate Corruption", in the February 2015 issue of The Sun, a Malaysian newspaper of general circulation. To view the full article, click here.
The Securities Commission Malaysia ("SC") recently issued the Guidelines on Regulation of Markets ("Guidelines") to introduce new requirements for the registration of equity crowdfunding ("ECF") platforms and provide governance arrangement for the operators of such platforms. One of the key features of the Guidelines relates to the requirement for an operator of an ECF platform to be able to operate an orderly, fair and transparent market. In this regard, an operator may deny an issuer access to its platform if it is of the view that the issuer or the proposed offering is not suitable to be hosted on the platform. An operator must also ensure that funds obtained from investors are safeguarded in a trust account until the funding goal is met. The Guidelines came into operation on 10 February 2015.
ECF is a new form of fundraising where small amounts of money are pooled from a large number of individuals to fund a business venture, project, cause or any other need. Online portals are used to publicise and facilitate ECF.
This development will encourage the growth of innovation, productivity and competitiveness in Malaysia through the bridging of the capital gap between small to medium enterprises and listed companies who typically raise funds from traditional sources of financing such as equity or debt capital markets. With such improved access to funds and capital, the cost of capital will foreseeably decrease, spurring the growth business start-ups in the country.
We wrote an article on ECF, titled "Equity Crowdfunding – the way forward", in the December 2014 issue of The Sun, a Malaysian newspaper of general circulation. To view the full article, click here.
Please note that whilst the information in this Update is correct to the best of our knowledge and belief at the time of writing, it is only
intended to provide a general guide to the subject matter and should not be treated as a substitute for specific professional advice.
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Christopher & Lee Ong
Level 22, Axiata Tower ,
No. 9 Jalan Stesen Sentral 5
Kuala Lumpur Sentral,
50470 Kuala Lumpur, Malaysia
www.christopherleeong.com
Contacts: Lee Hock ChyeManaging PartnerD +603 2273 1919F +603 2273 8310hock.chye.lee@christopherleeong.comYon See TingPartnerD +603 2278 8311F +603 2278 8322see.ting.yon@christopherleeong.comFiona SequerahPartnerD +603 7958 8310F +603 7958 8311fiona.sequerah@christopherleeong.comLim Wee HannPartnerD +65 62320606wee.hann.lim@rajahtann.comYau Yee MingPartnerD +603 2278 8311F +603 2273 8322yee.ming.yau@christopherleeong.comKuok Yew ChenPartnerD +603 7958 8310F +603 7958 8311yew.chen.kuok@christopherleeong.com| Rajah & Tann Asia is a network of legal practices based in Asia. |
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