Is Malaysia the sole global investor outlier in permitting proxy share trading?
The Securities Commission Malaysia (SC) should come clean to prove that there was no regulatory and enforcement failure in being unable to conclusively establish that Malaysian Anti-Corruption Commission (MACC) chief Azam Baki has committed a breach under section 25(4) of the Securities Industry (Central Depositories) Act 1991 (SICDA). This follows the opportunistic statement by Azam expressing gratitude to the SC for clearing him of any wrongdoing over his ownership of shares and closing its inquiry into the matter.
Such a dishonest and irresponsible statement from the SC has not only tarnished the reputation of SC in regulating and enforcing compliance but also put investor confidence in our country’s capital market at risk. Like every developed capital market in the world, Malaysia has outlawed proxy share trading through Section 25(4) of the Securities Industry (Central Depositories) Act 1991 (Sicda). How can SC not act when Azam has openly and publicly admitted that he had allowed his brother to conduct proxy share trading?
There have been reports that SC had not acted because Azam Baki had actually lied when he claimed that his brother had conducted proxy share trading through Azam’s account. If that is the case, then SC should come out clearly and unequivocally that Azam had conducted share trading transactions himself instead of a statement that is seen as covering up for Azam and clearing him of any wrongdoing.
Is covering up for one individual in Azam worth the reputation risk of SC and investor confidence in Malaysia’s capital markets? With SC clearing Azam, questions are also raised whether the earlier tit-for-tat investigations by MACC against the SC will also be closed or quietly forgotten. Can we then expect a similar statement from MACC clearing SC of any wrongdoing?