PETALING JAYA: Any company is subject to random checks of their physical premises and relevant financial documentation, says the Companies Commission of Malaysia (SSM).
The Registrar of Companies (RoC) has such powers accorded to him under Section 7B (1) of the Companies Act 1965, the SSM said in a statement released yesterday but dated Oct 18.
“The particular section in the act states: ‘For the purposes of determining whether a corporation or any officer of the corporation complies with this Act, the Registrar may have access to any place or building and may inspect and make copies of or take extracts from any book, minutes, lists or documents kept by the corporation required by or under this Act.’,” the SSM statement said, adding that there was no requirement to give any written notice of such physical inspections.
The statement did not refer to any specific company but it is believed to be a response to PKR vice-president Rafizi Ramli, who had criticised the actions of the SSM in carrying out a raid on the National Oversight and Whistleblowers Centre’s (NOW) office on Oct 14.
NOW is a non-profit body set up to promote the cause of whistleblowers, and is led by Rafizi, who is its founding executive director.
He accused SSM of not having submitted any notice in writing prior to the raid, where it demanded to see NOW’s financial records.
Rafizi had claimed that the SSM raid was against the law, as it does not have such powers unless it had previously written to the company giving notice of such action.
“By virtue of the provisions of the above and to ensure regulatory compliance, SSM has the power to enter any place or premises to inspect any relevant documents without having to submit prior notice to any company.
“However, if any company fails to submit documents requested during the examination process, SSM may issue a notice under section 7B (2) of the Companies Act 1965 to obtain copies of the documents related to the company within 14 days,” SSM said.
It continued by providing statistics of previous inspections carried out under various provisions of the act, saying 9,340 companies came under scrutiny between 2014 and October 2016.
“Another 281 firms were also audited for compliance under Section 167 of the same law during the same period, where these companies provided SSM with their recordkeeping practices.
“Regulatory and enforcement activities continue to be SSM’S main agenda in addition to efforts to educate business owners of the legal implications of compliance and the need for best corporate governance practices,” SSM said.
“This is to create a conducive business environment, improve the level of compliance within the corporate community, and to make Malaysia as the internationally preferred business destination,” it said.
Meanwhile, Rafizi said that he had spoken to his lawyers and advised his staff at NOW not to release any information unless the regulatory body submits a formal written request in advance.