Focus View
Making employers liable in graft cases is timely
FocusM team | 06 Apr 2018 00:30
Amendments to the Malaysian Anti-Corruption Commission (MACC) Act to make companies liable for the corrupt practices of their staff will send shivers down the spine of senior management.

A company will be deemed to have committed an offence if any person associated with it commits a corrupt act.

That includes its directors, partners, controllers and officers who are involved in the management of the company. The onus is on the company to prove it is not guilty. This will also be in line with such legislation abroad such as the UK Bribery Act.

The MACC (Amendment) Bill 2018 which was passed by the Dewan Rakyat on April 4 is timely and long overdue. In the Global Corruption Barometer 2017 (Malaysia), 46% of Malaysians thought business officials were involved in corruption. Many companies have also not signed the Corporate Integrity Pledge upholding anti-corruption principles.

Often, companies claim they have no knowledge or are not responsible for the actions of their staff when it comes to bribery. Such ignorance is not an excuse now.

In fact, companies sometimes ask their staff to bribe their way towards securing a contract or deal. Some companies even disguise such bribes as entertainment expenses.

There is also a suspicion some foreign companies support entities such as resellers to obtain contracts through dubious means. When these resellers are caught, the foreign company disclaims liability.

Malaysian companies with operations abroad can’t escape either. Many years ago, action was taken by a foreign government against a senior official of a Malaysian company operating there. It was inked to a well-known Malaysian listed group. The official was alleged to have attempted to bribe a government official there. However, the group itself was not held liable for the alleged crime.

Under the new legislation, Malaysian companies which have businesses at home or abroad are included. Likewise, it covers foreign companies with a business or part of a business in Malaysia. Malaysian partnerships are also included.

The amendments will compel companies to put in place adequate procedures to prevent their staff or associated persons from engaging in corrupt practices.

Well, with a maximum fine of up to 10 times the sum of gratification involved or RM1 mil (whichever is higher) and a maximum prison term of 20 years, or both, companies had better do so soon.

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