Financial Crime World

White-Collar Crimes: The Dark Side of Business

In Malaysia, white-collar crimes have become a growing concern, with many businesses and individuals falling victim to fraudulent activities and corrupt practices. This article delves into the world of criminal company law and corporate fraud, bribery, influence peddling, and anti-bribery regulations.

Criminal Company Law and Corporate Fraud

Fraudulent inducement of persons to invest monies or deal in securities is a serious offense under Section 594 of the Companies Act 2016 (CA) and Section 178 of the Capital Markets and Services Act (CMSA). This includes:

  • Making or publishing false statements
  • Concealing facts
  • Recklessly making misleading statements to induce others to enter into agreements related to securities

The punishment for this offense is severe, with a maximum imprisonment term of ten years and a fine of up to MYR3 million. Furthermore, if a company is placed in liquidation or proceedings are brought against it, the court can lift the corporate veil and hold individuals responsible for fraudulent trading personally liable to creditors.

The Malaysian Anti-Corruption Commission Act (MACCA) criminalizes bribery, influence peddling, and related offenses. These include:

  • Accepting gratification as an inducement or reward for doing or forbearing to do anything in respect of a matter or transaction involving a public body (Section 16)
  • Giving or accepting gratification by agents (Section 17)
  • Intending to deceive principals by making false statements (Section 18)
  • Corruptly procuring the withdrawal of tenders from public bodies (Section 20)

The penalties for these offenses are severe, with imprisonment terms of up to 20 years and fines of not less than five times the sum or value of the gratification.

Anti-Bribery Regulation

In Malaysia, anti-bribery regulations are in place to prevent corruption and promote transparency. These regulations apply to:

  • “Officer of a public body” - any person who is a member, officer, employee, or servant of a public body, including judges, members of parliament, and state legislative assemblies (Section 3)
  • Foreign public officials - persons holding legislative, executive, administrative, or judicial offices in a foreign country

The MACCA prohibits bribery and influence peddling by these individuals, as well as individuals who solicit or accept gratification from them.

Conclusion

White-collar crimes are a significant concern in Malaysia, with criminal company law and corporate fraud, bribery, influence peddling, and anti-bribery regulations all playing important roles in preventing and punishing these offenses. It is essential for businesses and individuals to understand these laws and regulations to ensure compliance and avoid falling prey to fraudulent activities and corrupt practices.