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Malaysia's New Anti-corruption Act Targets Executives

2019-01-28 17:31 Monday


On April 5, 2018, the Malaysian Parliament amended the Malaysian Anti-Corruption Commission Act 2009, implementing major changes to the section on responsibility for corporate corruption.

Under Malaysian law, the new act redefines legal liability for the crime of corruption in business organizations, holding directors, decision makers, executives, partners or managers of business organizations personally responsible for crimes committed under their watch. Unless the individual can prove that the crime was committed without his or her consent and he or she has performed the necessary due diligence to prevent the crime, he or she will be held accountable.

 Malaysia New Anti-corruption Act

Malaysia held its 14th general election on May 9, 2018. The new government surprised many observers with a landslide victory, and has made fighting corruption one of its main priorities.

According to some experts, the recent regulation shows that not only are business organizations liable for corruption offences committed by personnel, but also that senior managers who were in office at the time of the offence are considered to have committed the offence in person.

The new rules effectively reverse the burden of proof. In previous cases of corruption in business organizations, the liability of senior managers needed to be proved by the paintiff. In contrast, the new law requires defendants (senior managers) to provide their own evidence that the crime was committed without their consent or acquiescence, and that they performed the necessary due diligence. Otherwise, they will be presumed personally criminally liable.

While this presumption is rebuttable, senior managers must perform the unenviable act of proving it wrong or proactively documenting measures taken to prevent corruption.

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