Company Director Charged With Corporate Liability for Corruption
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The Malaysian Anti Corruption Commission (MACC) made a statement yesterday that a company director becomes the first person to be charged under the latest enforced corporate liability laws due to its previous director's alleged corrupt actions.
The MACC's investigation found that the former director had given a bribe of RM321,350 to a company while still with the firm. The bribe was in exchange for being granted subcontracts to charter the ships for oil exploration works.
The 64-year old former director allegedly committed the offences between June 29 and October 14, 2020, with the whole project valued to be worth about RM1 billion.
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Section 17 of the MACC Act 2009 came in to effect on June 1, 2020.
As a result of the ex-director's actions, MCC said the company's current chief would also face the charge under the corporate liability laws within MACC Act's Section 17A.
In the MACC Act 2009, Section 17A states that a company and its employees, so long as they are concerned in managing the company's affairs, are liable to action if found offering or giving gratification to gain, obtain, or retain an advantage for the company.
The commission said that it had arrested the former director on the evening of March 18, 2021, at the MACC HQ in Putrajaya. He is expected to be charged at the Shah Alam Sessions Court in Selangor today, under Section 16(b)(A) of the MACC Act, for offering bribes to secure vessel charter contracts.
Meanwhile, the same company's current director, who the MACC also called in to assist investigations, will be charged as the company's representative under Section 17A of the MACC Act in the same court today.
The MACC also said that this is the first case for an offence under Section 17A of the MACC Act 2009 after it came into effect on June 1, 2020.
Section 17A of the MACC Act 2009
Under Section 17A of the MACC Act 2009, a company may be held criminally liable for acts of corruption by its directors, employees or other associated persons.
Section 17A enforces strict criminal liability on commercial firms where an associated person corruptly offers any gratification to obtain or retain business, or an advantage in the business conduct, for the commercial firm.
The provision's scope is broad and applies to Malaysian companies and foreign companies operating in Malaysia. The company's "associated persons" include:
- Directors
- Employees,
- Most third-party service providers.
Since the offence is a strict liability offence, an organisation will be liable regardless of whether it had actual knowledge of its associated persons' corrupt actions.
Where an organisation commits an offence, the MACC deems the directors, management, and officers to have committed the same offence unless they can prove that the organisation committed the offence without their consent and that they exercised due diligence to prevent said offence.
The offence comes with a penalty of a fine not less than ten times the bribe's value or RM1 million (whichever is higher) and/or imprisonment not exceeding 20 years.
Sources: Malay Mail, Global Compliance News
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