AMID rising sensitivity in the wake of the stock trading fiasco involving the Malaysian Anti-Corruption Commission (MACC) chief commissioner Tan Sri Azam Baki, defining transparency in the context of unbiasedness has become increasingly challenging, especially for law enforcers who are entrusted to police law abidance.
Outside the realm of the graft buster, MalaysiaNow news portal yesterday (Jan 13) questioned the presence of directors of pubic listed companies (PLC) as board members of the Securities Commission (SC) from the perspectives of integrity and conflict of interest, especially considering that they are also expected to regulate the same companies in which they have some interest in.
While the involvement of SC directors in companies is not prohibited by law, questions are likely to be raised over the extent to which they can remain independent in executing their duty as a capital market regulator.
“How does having members of the country’s regulatory board in a business not influence the SC’s decisions even as non-executive directors?” quipped a prominent businessman cited by MalaysiaNow.
“Right now, what we are seeing is a potential conflict of interest in a probe into a conflict of interest case by a body helmed by individuals with conflicts of interest.”
There are currently three potential conflict of interest points within the SC now, according to MalaysiaNow:
- Datuk Wee Hoe Soon @ Gooi Hoe Soon: The director also sits on the board of Yinson Holdings Bhd, Red Ideas Holdings Bhd and Perusahaan Sadur Timah Malaysia Bhd as well as being an alternate director at Hup Seng Industries Bhd.
Point of contention: Yinson Holdings is an oil and gas company which had a brush with the SC over an insider trading case involving its former shareholder Yeow Kheng Chew. “Gooi was later appointed to the SC board of directors after the case was closed,” a source familiar with dealings in the commission told MalaysiaNow.
- Datuk Syed Zaid Albar: It is a well-known fact that the SC executive chairman and brother of former Foreign Minister Tan Sri Syed Hamid Albar swapped his directorship position in Yinson Holdings with his daughter Sharifah Munira Syed Zaid when he was appointed to head the SC on Nov 1, 2018.
Point of contention: Munira was named as an independent non-executive director (INED) of Yinson on Jan 1, 2020 while her father is the SC’s head honcho.
- Lynette Yeow Su-Yin: She currently sits as an INED on the boards of Malaysia Building Society Bhd and CTOS Digital Bhd, a leading credit report company.
Point of contention: Last year, the SC gave green light to CTOS to increase its stake in local rating agency RAM Holdings Bhd to 8.1% by acquiring an additional 350,000 shares for RM7.6 mil.
Doubtlessly, soliciting viewpoints from people who are close to PLC are crucial for the SC to formulate the most effective policies so as to enhance the vibrancy of the Malaysian capital markets while allowing them to thrive internationally.
An analogy in the realm of cybersecurity is that one needs an ‘ethical’ hacker to beat a ‘rogue’ hacker at his own game.
If so, a humble proposal is perhaps for SC to appoint ex-PLC board members after subjecting them to a sufficient cooling off period, say three years. There are obviously many qualified candidates around.
Alternatively, current PLC board members can be invited to provide their views rather than they for them to sit as SC board members per se. This will save SC a lot of headache with regard to issues surrounding conflict of interest. – Jan 14, 2022