SC: Misconduct rate not alarming

THE Securities Commission (SC) chief says investors shouldn't be alarmed by the recent spate of corporate misconduct in Malaysia.

"As long as these cases are appropriately dealt with - and they are - I do not see it as alarming, but we are not happy, of course. Misconduct is not a characteristic of the (Malaysian) market," chairman Tan Sri Zarinah Anwar told reporters on the sidelines of the 4th International Islamic Capital Market Forum in Kuala Lumpur yesterday.

She was asked to comment on the rising incidence of suspected wrong-doings at Malaysian firms of late.

In the last two months alone, at least three companies have been in the spotlight for all the wrong reasons.

Furniture-maker Kenmark Industrial Co (M) Bhd is being investigated following its rapid financial decline, while Linear Corp Bhd had the market agape when it was revealed that almost all of its cash was taken out by one director.

SJ Asset Management Sdn Bhd, meanwhile, an unlisted company, has been prohibited by the SC from taking care of new funds after an examination of the fund manager raised concerns.

Zarinah, however, insisted that these cases comprised just a handful of the 1,000-odd listed firms in Malaysia.

"Naturally, the recalcitrant ones are the ones that tend to hog the headlines, so it would be unfair to categorise our market as one where is a lot of misconduct and misbehaviours," she remarked.

She said one of the main reasons "misconduct and misbehaviour" has been emerging of late is because of enhanced regulatory supervision and surveillance on the SC's part.

Also, more stakeholders have come forward to whistleblow on wrong-doings. In the last few years, there have been over 40 cases of whistleblowers, she said.

Meanwhile, on another matter, Zarinah said said it was mainly Bursa Malaysia Bhd that's looking into whether Berjaya Corp Bhd made proper disclosures in its plan to buy a 70 per cent stake in Ascot Sports Sdn Bhd.

Berjaya Corp had in May told Bursa that Ascot, a company controlled by tycoon Tan Sri Vincent Tan, had been granted a sports betting licence by the government. The government, however, later said that it had yet to award the licence.

(Last week, the government scrapped any plan it might have had to issue that licence).




By Adeline Paul Raj
Business Times