Top management can’t claim ignorance of graft under new law, says MACC

The Malaysian Anti-Corruption Commission says companies need to show they have taken measures and due diligence to protect themselves from corrupt staff members.

PETALING JAYA: The top management of companies cannot claim they did not know what was happening when it comes to corrupt practices, a senior Malaysian Anti-Corruption Commission (MACC) officer said today.

To be non-liable, Jayantha Gupta said the responsibility was now with companies to show proof of due diligence.

“If you are the ‘parent’, then you should know what the ‘children’ (staff at bottom ranks) are doing.”

He said there should be risk assessment on how officers in the low, middle and high posts were performing and to take various control measures on gift policies, among others.

“This is not rocket science. It should come naturally under the management policies,” Gupta told a webinar on “Growing Challenges for SMEs in Combating Corruption and Current Trends in Combating Corruption in GLCs and Private Sector”.

The webinar was organised by the Malaysian Institute of Management.

Gupta, who is from MACC’s community relations branch community education division, said any form of gratification will be included as an offence.

Under the newly enforced Section 17A of the MACC Act, a commercial organisation can be found guilty if individuals involved with the organisation give or agree to give any form of bribes with the intention of enabling the business entity to profit from the transaction.

Gupta said this section was meant to prevent abuse of power among top management and decision-makers.

He said MACC will look at soliciting, accepting and offering of rewards.

“It is not only at the point of exchanges of items. Even agreements made through WhatsApp, phone or conversations can constitute an offence if we have proof,” he said.

“That is why some people have been charged with multiple offences. This is because there is evidence to prove that the agreements and offers were made at times by various individuals,” he added.

It aims to encourage business activities to have good integrity and promote good corporate governance practices. Commercial organisations are liable to punishment if their employees or associates are involved in corruption.

Those found to make false claims or fabricate information with the aim to deceive will also be charged, he added.

If a commercial organisation is found guilty, the penalty under Section 17A (2) is a fine of not less than 10 times the value of the bribe or RM1 million, whichever is higher, or imprisonment for up to 20 years, or both for those involved.

What companies must look out for

Lawyer Selvaraja Muthaya said various sectors have different key areas open to bribery.

For instance, in the construction and tender processes, this would involve the agreements and procurements. For the warehouses, companies need to be wary of people involved in inspections and administration.

“Marketing-related companies need to look out for sales commissions and payment facilitation.”

He said even though a lot of companies had two years to access low, medium and high-risk areas of corruption since the law was passed in 2018, “many companies are just starting now” after enforcement began this month.

He also said all tender processes should be part of a software system which any manager could have access to.

“If it is a paper trail, it can be shredded. If it is in the system, then it will be difficult to erase,” he said, adding that such measures could help companies in their defence as prevention comes out of regular monitoring practice.

“Otherwise, the judge will have no choice but to charge you. Adequate procedures must be put in place,” he said, adding that the process may be simpler for smaller companies or factories.

He advocated training so that staff are aware of the process and opportunities for bribery and are aware of ways to handle the issue.

Raymon Ram, from Graymatter Forensic Advisory, said all public-listed companies must have proper procedures set out for internal and external staff.

He suggested that companies using software and analytics to carry out online real-time monitoring of transactions look for anomalies in payments and processes.

“It would only take few minutes,” he said, further stating that technology can be used to promote integrity factors in a company.

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