“SSM ENFORCEMENT UPDATES”

SSM NATIONAL CONFERENCE 2012
“SSM ENFORCEMENT UPDATES”
AZNORASHIQ MOHAMED ZIN
Director
Investigation Division
Companies Commission Malaysia
13 June 2012, Wednesday
Sime Darby Convention Centre, Kuala Lumpur
SSM Enforcement Structure
MINISTER, KPDNKK
COMMISSION MEMBERS
Training
Academy
(COMTRAC)
Deputy Chief Executive Officer
(Operations)
Corporate
Development
and Policy
Division
Registration
Services Division
2
Business
Development
Marketing
Division
Branch
Operations
Section
Internal Audit
CHIEF EXECUTIVE OFFICER
Deputy Chief Executive Officer
(Services)
Public Affairs
Section
ICT Division
Corporate
Resources
Division
Senior Director –
Enforcement
Compliance
Division
Investigation
Division
Legal
Services
Division
Complaints
Section
Enforcement: SSM Compliance
FUNDAMENTAL
CORPORATE
GOVERNANCE
COMPONENTS
S.143(1): Holding
Annual General
Meeting (AGM) every
calendar year.
S.165(4)/(5): Lodge
Annual Return (AR)
together with audited
accounts every
calendar year
S.169(1): Tabling
audited accounts at
the AGM.
ACCOUNTABILITY,
TRANSPERANCY,
RESPONSIBILITY
BENEFITS:
Higher compliance rate :
- Positive reputation.
- Rapport with stakeholders.
- Long term business
Reduced compliance cost :
- Cost effective: Funds for
business purposes, rather than
to pay penalties.
Updated information to the public :
- creates a well-informed
business community.
- attracts more investments
3
HIGHER
COMPLIANCE
RATE
RESPONSIBLE
PARTIES:
•
•
•
•
•
BOD
Company Secretary
Auditors
Shareholders
Management
Compliance Rate: The milestone
Compliance Rate : Achievements & Targeted Rate
2011:
90.36%
2012
Target:
91%
2003:
44%
4
2010:
87%
2014
Target:
95%
• The targeted compliance
rate for 2014 is at 95%,
under SDP II projects.
Compliance Rate 2011
90.36% compliance
rate.
Pro active initiatives:
1) Issuance of reminder notices:
• 4 months before AGM is
due
• Number of notices sent for
AR 2011: 1,199,616.
2) Striking-off inactive
companies from SSM’s
register.
RESULTS
Feedback gathered by SSM for noncompliance offences:
* Company is not active.
* Delayed in the preparation of financial
statements.
* Unable to get directors’ signatories.
* Unaware on the appointment as director
5
 Beyond targeted rate:
89%
 Compliance rate
calculated based on the
number AR due and
lodged in 2011.
Conclusion : Incompetent
company’s officers remain as
the main contributing factor for
the basic non-compliance.
Surveillance on Media & Web-based
Business Activities in 2011
Website monitoring:
•
•
•
Involved 1,570 companies & business.
92% complied with the relevant
requirements under CA’65 or ROBA’ 56.
Compliance issues:
 Basic compliance i.e Lodgment of
AR, registration of business.
 Investment scheme: Interest
scheme & Kootu scheme.
Media monitoring:
•
•
•
6
Involved 1,601 companies & businesses
53% complied with the relevant
requirements under CA’65 or ROBA’ 56.
Compliance issues:
 Basic compliance i.e Lodgment of
AR & registration of business.
 Investment scheme: Interest
schemes & kootu scheme.
Common offences:
• Offering unregistered investment
scheme i.e unregistered interest
schemes,
• Offering Kootu scheme.
• Failure to register or renew
business registration.
• Failure to lodge AR.
Actions:
• Enforcement action:
Administrative & criminal sanction
for non-compliance issues.
• Refer to other enforcement
agencies i.e issue related to
Multi-Level Marketing will be
forwarded to KPDNKK for further
action.
• Periodical reporting to National
Security Council.
Compliance:
Basic Corp. Governance Offences
Offences under CA’65
No.
7
Section
Brief explanation
1.
143(1)
2.
Year
2011
2010
Failure to hold AGM of the
company within prescribed
period.
130,255
78,798
165(4) & (5)
Failure to lodged AR within
prescribed period.
127,527
75,850
3.
169(1)
Failure to table audited
accounts at the AGM within
prescribed period.
111,676
62,560
4.
139(1)(B)
Company secretary post left
vacant for more than 1 month.
546
2
5.
139C(2)
Failure to act honestly or use
reasonable diligence in
discharging duties as a company
secretary.
18
64
6.
139C(3)
Continuing to act as a company
secretary after being disqualified.
38
27
7.
139C(3)
Directors allowing a disqualified
person to continue to act as a
company secretary.
363
315
Compliance:
Basic Corp. Governance Offences (Con’t)
Offences under CA’65
NO.
Section
Brief explanation
8.
139B(5)
9.
Year
2011
2010
Failure to renew company secretary
license 30 days before expiry.
80
38
121(1)(b)
Failure to print the name and company
number on all official company’s
documents.
354
113
10.
121(3)
Failure to display name of the
company at business place or
registered address.
44
240
11.
167(1A)
Failure to caused appropriate entries to
be made in the accounting record
within 60 days of the completion of
transaction.
2
2
12.
167(1)
Failure to keep accounting records
1
38
13.
9(6)
Failure to obtain written consent from
auditors prior to their appointment.
47
-
14.
157(1)
Failure to keep minute book at the
registered office.
11
-
15.
158(1)
Failure to keep register of members.
7
-
8
Compliance: ROBA 1956 Offences
Offences under ROBA’56
No
9
Year
Section
Brief explanation
2011
2010
1.
12(1)(a)
Carrying on business without
registration.
3,922
2,263
2.
12(1)(b)
Carrying on business after
business registration expired.
224,152
117,028
3.
12(2)
Failure to display certificate of
registration.
638
1.085
4.
Rule
17A(1)(b)
Failure to submit change of
registered business address.
1,791
1,114
5.
Rule
17A(1)(c)
Failure to file notice of
termination.
363
189
6.
Rule 17A(2)
Failure to display signboard.
756
1,309
Enforcement: Sources of Investigation
Referrals from line departments (based on surveillance carried out)
 Whistle blowers (Current or ex-employee)
 Report lodged by auditors pursuant to section 174(8A) CA 1965
 Complaints lodge by members of the public (Section 368A CA 1965 –
Protection of informers and information )
 Paper Vetting /Sweeping
 Other agencies & statutory bodies:

•
•
•
•
•
•
•
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PDRM- Commercial Crime
Bank Negara Malaysia
Bursa Malaysia
Securities Commission
Consumer Affairs – KDPN
Other Ministry
Public Complaints &
Services Bureau
PUBLIC
MASS
MEDIA
INTERNAL
SOURCES
OTHER
AGENCIES &
STATUTORY
BODIES
Types of Complaints Received by SSM
No
Nature of Complaints
Received
2008
2009
Business
2010 2011 2008
2009
2010 2011
1
Fraud and serious
offences
210
261
400
380
72
165
155
175
2
Non-Compliances
118
155
218
467
10
30
5
85
64
71
60
92
0
0
0
2
34
42
54
62
1
1
0
0
3
0
2
4
0
0
0
0
3
4
5
Improper Conduct by
Directors
Improper Conduct by
Secretaries
Improper Conduct by
Auditors
6
Complaint against SSM
17
17
23
20
11
12
15
61
7
Enquiry
11
30
195
167
13
12
91
74
8
Beyond Jurisdiction/
Concurrent Jurisdiction
Issues
74
68
131
129
37
55
68
69
9
NFA issues
64
95
160
194
25
12
10
65
21
23
17
21
0
0
0
0
616
762
169
287
344
531
10 Others
Total
11
Company
1260 1536
SSM’s Enforcement Cases
12
Enforcement: Investigation Scope
13
Financial &
Fraud
Corporate
Governance
• Protection of
Minority
Shareholders
• Consumer
Protection
• Forensic
Accounting
• Insolvent Trading
• MASB Cases
• Share Hawking
• Fraudulent
Investment
• Cases on Due
Diligence
• Breach of
Fiduciary Duties
• Corporate Fraud
• False &
Misleading
Information
• Cases on
Interest
Schemes
• Insolvency
• Foreign
Companies
• Related party
transaction
• Non-disclosure
cases
Special Projects
General Offences
• Cases of Public
Interest &
National Security
• Ministerial
Decree
• Intelligence
• AMLA
• Annual returns
• Statutory records
• Non-tabling of
accounts
• AGM offences
• Referred cases
• ROB cases
• Trust companies
• Kootu Funds
Investigation Division
Achievements in Year 2011
NO
ACHIEVEMENTS
1) High Profile Cases Completed
2) Number of IP Opened / Completed
Prominent Corporate Governance Cases
3)
Completed
4) Prominent Fraud Cases Completed
5) Raiding Conducted
6) Execution of Warrant of Arrest
Anti Money laundering & Terrorist
7)
Financing Cases Completed
8) Issuance of Notices
9) Number of Statement Recorded
10) External Networking
11) Media and Press Statements
14
STATISTICS
 24 cases
 164 / 185 IP
 33 cases
 70 cases
 13 cases
 17 individual
 2 cases




3850 notices
2800 sessions
35 Agencies
More than 34 occasions
Investigation Achievement Highlights
15
Investigation Achievement Highlights
16
Investigation Achievement Highlights
17
Investigation Achievement Highlights
18
Jawatankuasa Khas Bersama (JKB)
Bagi Menangani Jenayah Kolar Putih







19
Special Task Force in Combating White Collar Crime.
Established in 9 March.
Direction of the Prime Minister and the Cabinet.
Chaired by the Minister of KPDNKK.
JKB Components:

High Level Committee chaired by the Minister

Working Level Committee chaired by CEO of SSM
The Secretariat of JKB is Investigation Division of SSM
Participating Regulatory Agencies (by invitation and Minister’s consent):
Jawatankuasa Khas Bersama (JKB)
Bagi Menangani Jenayah Kolar Putih
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Enforcement: Way Forward
1) Regulator’s expectation
•
•
•
Awareness on the importance of good corporate governance.
Higher percentage rate of compliance among the general public in the country.
Proactive measures to enforcement actions.
2) Education and Training
•
To better support the new discipline i.e: the future of Forensic Accounting
Investigation/Investigators
3) Collaboration between Enforcement Agencies, Universities,
Accounting firms etc
•
•
•
•
Initiative: JKB (Special Task Force in Combating White Collar Crime)
Attachment program – Cross institutions
CSR: Sponsorship of Academic Chair by Private Firms
Setting-up: National Academy/Regional Academy
4) Back to basics
•
•
•
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Regulating “Human behaviour”?
How to instill morality and integrity in regulating human behaviour?
Indeed Religion as a final saviour?
“It takes 20 years to build a reputation and five minutes to
ruin it. If you think about that, you’ll do things differently.”
Warren Buffet
CEO, Berkshire Hathaway
THANK YOU
HJ. AZNORASHIQ MOHAMED ZIN
Director, Investigation Division
Companies Commission Malaysia
Level 27, Menara SSM@Sentral
No.7, Jalan Stesen Sentral 5
Kuala Lumpur Sentral
50470 Kuala Lumpur
Website: www.ssm.com.my
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