Reported by Nurul Athirah Ja’afar
On 18th March 2021, marks the first case of a company, Pristine Offshore Sdn Bhd, being charged by the Malaysian Anti-Corruption Commission, under the newly incorporated Section 17A of the Malaysian Anti-Corruption Commission Act 2009.
According to The Star[1], the former director of the company responsible, Chew Ben Ben, was charged under the same Act for allegedly offering a bribe of RM 321,350 to secure a sub-contract for the company. The transaction made had proceeded to have the company liable as well due to the acts of bribery committed by its “associated persons”, meaning to include the directors, partners, employees and service providers of the company, according to Section17A(6) of the Act.
As discussed in our previous article, we have looked at how Section 17A(1) that imposes corporate liability for corruption. The provision is as follows;
Offence by commercial organisation
17A. (1) A commercial organisation commits an offence if a person associated with the commercial organisation corruptly gives, agrees to give, promises or offers to any person any gratification whether for the benefit of that person or another person with intent –
- To obtain or retain business for the commercial organization; or
- To obtain or retain an advantage in the conduct of business for the commercial organization.
From this, Pristine Offshore Sdn Bhd is facing a risk and could be liable to the conviction under Section 17A(2) of the Act, which reads as follows:
(2) Any commercial organisation who commits an offence under this section shall on conviction be liable to fine of not less than ten times the sum or value of the gratification which is the subject matter of the offence, where such gratification is capable of being valued or is of pecuniary nature, or one million ringgit, whichever is the higher, or to imprisonment for a term not exceeding twenty years or to both.
The case was read in Sessions Court before the current director of the company and was also made clear by the judge on the liability that could incur upon the director, in which he himself may face prosecution. Based on Section 17A(2) of the Act, it is clear that to serve the jail time, if the conviction was upheld, will have the current director serve this imprisonment. This can also be found in Section 17A(3) of the Act, which reads as follows:
(3) Where an offence is committed by a commercial organization, a person—
(a) who is its director, controller, officer or partner; or
(b) who is concerned in the management of its affairs,
at the time of the commission of the offence, is deemed to have committed that offence unless that person proves that the offence was committed without his consent or connivance and that he exercised due diligence to prevent the commission of the offence as he ought to have exercised, having regard to the nature of his function in that capacity and to the circumstances.
Both company and current director are now at stake based on this new corporate liability imposed. However, as we have discussed in our previous article, Section 17A had provided statutory defences, one of which is provided under Section 17A(4), which reads:
If a commercial organization is charged for the offence referred to in subsection (1), it is a defence for the commercial organization to prove that the commercial organisation had in place adequate procedures to prevent persons associated with the commercial organisation from undertaking such conduct.
In addition, while a company may depend on the defence as laid out, it bears ambiguity on what ‘adequate procedures’ amount to. The sole guidance provided this far is Section 17A(5) of the Act whereby such procedures will be made by the Ministry. This is then assisted with the release of the Guidelines on Adequate Procedures to be issued by the Prime Minister’s Department.
In relation to the liability incurred on the current director of the company, it would be a defence for him and any other associated persons mentioned under Section 17A(6) of the Act, that they must prove they had not consented to the offence and had exercised due diligence to prevent such offence as referred to Section 17A(3) of the Act.