Latest news with #TransparencyInternationalMalaysia
New Straits Times
a day ago
- Business
- New Straits Times
TI-M: AG's report exposes systemic failures, urges urgent reform
Transparency International Malaysia (TI-M) has urged the government to enact structural reforms in response to the Auditor General's Report 2/2025, warning that repeated governance failures revealed are emblematic of systemic breakdowns. "Outdated procedures, weak financial oversight and a culture of impunity have allowed such practices to continue year after year," said the watchdog in a statement. TI-M welcomed the expanded audit scope and 2024 amendments to the Audit Act 1957, which empowers the auditor general to monitor the implementation of recommendations via the Auditor General's Dashboard. It also praised enforcement that helped recover RM157.73 million between 2024 and mid-2025. "However, laws and dashboards alone are insufficient. TI-M stresses that transparency must be matched with enforcement, and that every agency implicated must be held accountable without delay." TI-M said these recurring findings highlighted institutional weaknesses that demanded structural reform, not just administrative corrections. It highlighted examples from the AG's report, such as Felcra Bhd's governance failures in lease procurements worth RM241.76 million and Universiti Kebangsaan Malaysia's RM58.45 million in irregular tenders awarded without proper committee recommendation. The group also highlighted the army's failure to collect RM162.75 million in penalties for delayed military vehicles deliveries and improperly fragmented procurement contracts, ongoing weaknesses in cooking oil subsidy management by the Domestic Trade and Cost of Living Ministry and manipulation risks in the Finance Ministry's Pre-Qualification procurement method. It said there must be immediate action on four fronts—enforcement, public disclosure, independent monitoring and legislative reform. It demanded swift enforcement by the Malaysian Anti-Corruption Commission, police and Attorney-General's Chambers on all cases involving procurement fraud, abuse of power or negligence. It urged all implicated ministries and agencies to publicly disclose remedial actions within 30 days, covering recovery of funds, disciplinary measures and procedural reforms, to restore public trust. TI-M also pushed for mandatory implementation of Independent Expert Monitors in all Integrity Pacts for high-risk procurements, calling them a credible safeguard against collusion and corruption in major contracts. Finally, it called for the tabling of a comprehensive Public Procurement Act that would provide a unified, legally enforceable framework with transparency standards, legal sanctions, whistleblower protections and independent oversight. Meanwhile, Malaysia Integrity and Governance Society president Datuk Seri Dr Akhbar Satar said Malaysia must urgently enforce a stringent and transparent procurement framework to curb fraud, corruption and waste. He said this in response to findings in the Auditor General's Report. "Transparency is the antidote to the disease of corruption. Large amounts of public funds are channelled to the market through public procurement. It continues to be vulnerable to fraud and corruption." Akhbar said contracts in organisations should be awarded to only qualified, reliable and competent contractors through a system with strong oversight and continuous monitoring. "Procurement must follow a tight legal framework to ensure that standards are met and there is quality in the selection process." Common procurement lapses, he said, included conflict of interest, misuse of power, undue influence in the needs assessment, embezzlement, fraud in bid evaluation and tender manipulation, and bribery of public officials. Quoting former auditor-general Tan Sri Ambrin Buang, Akhbar said the estimate that up to 30 per cent of Malaysia's public project value was lost owing to mismanagement and corruption aligned with the World Bank's finding that 20 per cent to 30 per cent of public contract budgets were wasted. He said lack of monitoring and failure to comply with policies were key drivers of corruption and spending leakages. The most common malpractice, he added, was taking "commissions" from bidders by unethical officers. He urged heads of department to actively monitor projects and suppliers to prevent monopolies and abuses. "They themselves must be whiter than white," he said.
The Star
a day ago
- Business
- The Star
Watchdogs call for Act to keep govt procurement in check
PETALING JAYA: A comprehensive Public Procurement Act with enforceable legal powers to address long-standing weaknesses in government procurement is urgently needed, say experts and watchdog groups. Transparency International Malaysia (TI-M) president Raymon Ram (pic) said the Act must include transparency standards, independent oversight, legal sanctions for non-compliance, whistleblower protections and clear procurement dispute mechanisms. 'Simply consolidating current guidelines is inadequate; we need a law with teeth,' he said in a statement yesterday, following the release of the Auditor-General's Report 2/2025. Raymon also called for swift enforcement by all relevant agencies, including the Malaysian Anti-Corruption Commission, police and others. 'All cases involving procurement fraud, abuse of power or negligence must be referred for investigation or prosecution. 'Any form of inaction sends the wrong signal to both the public and potential wrongdoers,' he said. TI-M also urged all implicated ministries, departments and agencies to publish clear corrective measures, including recovery of funds, disciplinary steps and procedural reforms, to restore public confidence and show institutional responsibility. Raymon also called for independent experts and third-party observers in all integrity pacts in high-risk procurements. 'The Auditor-General's Report must not be an annual ritual of regret,' he said, adding that 'it must serve as a catalyst for reform, one that rebuilds institutional integrity, ensures justice for wrongdoing and protects the interests of the rakyat.' On the Pre-Qualification (Pre-Q) system of procurement that was trialed and implemented by multiple ministries, Centre to Combat Corruption and Cronyism (C4) chief executive officer Pushpan Murugiah said C4 agreed with the findings of the Auditor-General's office, since the system was found to be inefficient and open to abuse, an open tender system should have been used instead to eliminate or at least reduce corruption risks. 'Based on the Auditor-General's Report in this instance, the goal of efficient procurements through the implementation of the Pre-Q system was hampered by the lack of a maximum period for second-stage invitation, causing them to be unnecessarily prolonged,' he said. The main issue that still needs to be addressed is that there is no legally binding baseline policy that sets the standard for all government procurements, he added. 'C4 Centre has long advocated for a Government Procurement Act that sets out minimum standards of adherence in terms of transparency, reporting and accountability at all stages of the procurement process, from advertising of tender until project implementation. 'We have seen that piecemeal reforms in specific areas of procurement does little to remedy the risks, and only shifts the flaws onto other aspects of the procurement process,' said Pushpan. Malaysia Corruption Watch (MCW) president Jais Abdul Karim said Parliament and the Public Accounts Committee (PAC) should also summon the relevant parties for open public hearings. 'We need to accelerate the implementation of the eSelfAudit system, as announced by the Auditor-General, to prevent arbitrary approvals,' he said. On the management of subsidised cooking oils, Federation of Malaysian Consumers Associations (Fomca) chief executive officer Saravanan Thambirajah proposed an IC-linked purchase system. This, he said, would be similar to the approach used in the Sumbangan Asas Rahmah (Sara) programme. 'By linking purchases to consumers' IC, the authorities will be able to prevent repeat purchases beyond the permitted limit, and ensure that subsidies reach genuine domestic consumers rather than being diverted to the commercial sector,' he noted. He said an improved digital tracking system was needed, allowing authorities to watch for abnormal purchase patterns or unusually high sales, in real time. Saravanan said the issue represented a misuse of taxpayer funds and directly affected low and middle-income households who were the intended beneficiaries of the subsidies. 'While the intention of subsidising cooking oil is to shield vulnerable groups from the rising cost of living, it does not serve the purpose if leakages occur. 'In fact, they worsen the burden on low-income households by creating artificial shortages and driving up prices,' he said, stressing the need to reassess the sustainability of blanket subsidies.
Malaysiakini
22-05-2025
- Business
- Malaysiakini
CCM's response to TI-M on beneficial ownership information
LETTER | The Companies Commission of Malaysia (CCM) refers to the statement by Transparency International Malaysia (TI-M) and its public commentary on social media concerning the limited access of beneficial ownership (BO) information to the public. CCM has introduced a comprehensive beneficial ownership reporting framework under the Companies Act 2016 through the Companies (Amendment) Act 2024, which came into effect on April 1, 2024, and the Limited Liability Partnerships Act 2012 through the Limited Liability Partnerships (Amendment) Act 2024, effective Jan 31, 2025. CCM wishes to clarify that the implementation of the BO framework is guided by Malaysia's commitment to uphold the highest standards of corporate transparency while ensuring compliance with the recommendations of the Financial Action Task Force (FATF) and findings from the National Risk AsseCCMents. The regulatory framework has been designed to balance the need for transparency while ensuring personal data, national interest, and security are fully protected. Both bills proposing amendments to the Acts underwent extensive public consultation processes and were presented to the MPs. The issue of access to BO information was thoroughly debated in Dewan Rakyat and Dewan Negara before both amendments were passed. Under one of the four main policy statements of the Companies (Amendment) Bill 2023 consultation, the scope of strengthening the beneficial ownership reporting framework was proposed. Among others, Subsections 613(1)(aa) dan (ba) of the Companies Act 2016 were introduced to confer powers on the minister to make regulations concerning any matters relating to the access to beneficial ownership information as well as the scheme of compromise or arrangement, corporate voluntary arrangements, judicial management, liquidation, and receivership. This led to the introduction of the Companies (Access to Register and Information Relating to Beneficial Ownership) Regulations 2025, which took effect Jan 10, 2025. Similar provisions were also introduced under the Limited Liability (Amendment) Bill 2024, where BO information disclosure was made mandatory via the Limited Liability (Amendment) Act 2024. To further support the stakeholder engagement, CCM issued a 'Consultative Document on the Proposed Guideline for the Reporting Framework for Beneficial Ownership of Companies (Revised)' on Dec 22, 2023. The consultation period was open to the public until Jan 31, 2024. Subsequently, CCM has also issued a 'Guidelines for the Reporting Framework for Beneficial Ownership of Limited Liability Partnerships (Revised)' on Aug 9, 2024, where the consultation was also opened to the public until Sept 9, 2024. Both documents received feedback from the industry players, legal professionals, enforcement authorities and the public. These initiatives reflect CCM's ongoing commitment to transparency and inclusivity in the development of a robust and effective legal framework for BO disclosure, particularly in matters related to data access by relevant parties. Effective April 1, 2024, CCM mandated the submission of BO information in line with the enforcement of the Companies (Amendment) Act 2024. As of April 30, 2025, a total of 636,342 companies, representing 92.57 percent of the 687,412 companies with existing status, have submitted their BO information. With the issuance of the Companies (Access to Register and Information Relating to Beneficial Ownership) Regulations 2025, which came into effect on Jan 10, 2025, CCM will also issue similar regulations for limited liability partnerships at a later date to be announced. Under these regulations, access to BO data is restricted and granted only to specific categories of persons for legitimate purposes, particularly in the context of anti-money laundering, counter-terrorism financing, and promoting good governance. Access to BO information is limited to the following categories of persons, each identified based on their regulatory, enforcement or compliance-related roles and responsibilities: The beneficial owner; Individuals authorised by the beneficial owner; Enforcement agencies and competent authorities under Section 3(1) of the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 (Act 613), such as Bank Negara Malaysia, police, and MACC; Reporting institutions carrying out anti-money laundering and counter terrorism financing activities as listed under the First Schedule of Act 613; and The Finance Ministry, specifically for functions related to government procurement. Authorised agencies, enforcement bodies and regulated institutions may access BO information for purposes aligned with their statutory functions. These include carrying out investigation activities, ensuring compliance with anti-money laundering and counter terrorism financing requirements and conducting know-your-customer or customer due diligence procedures. This framework supports the integrity of the corporate ecosystem by promoting transparency, facilitating informed decision-making and strengthening confidence in the use of legal entities for legitimate economic activities in Malaysia. This approach reflects practices across Asean, where access to BO information is similarly restricted to competent authorities and selected institutions. In countries such as Singapore, Thailand, Indonesia, the Philippines, and Vietnam, BO data is collected by regulatory bodies such as the Accounting and Corporate Regulatory Authority in Singapore, the Department of Business Development in Thailand, the Securities and Exchange Commission in the Philippines, and other designated authorities. However, this information is not made available to the public. The same applies to Brunei, Cambodia, Lao PDR, and Myanmar, where access to BO information remains limited to enforcement agencies and regulatory authorities. This regional consensus underscores a common emphasis on protecting personal data and preserving national security while enabling access for legitimate regulatory and compliance purposes. It is also important to highlight that there are growing concerns about public access to BO information globally. Several major East Asia economies - including China, Japan and South Korea - have adopted a similar stance by restricting access to BO information, limiting its availability to designated government and regulatory authorities. In Europe, public access to BO registers has also come under increasing scrutiny. Notably, countries such as France, Germany, Austria, and the Netherlands have restricted public access following the European Court of Justice's landmark ruling on Nov 22, 2022 (ECLI:EU:C:2022:912). The court ruled that unrestricted public access constituted a serious infringement on the rights to privacy and personal data protection under the EU Charter of Fundamental Rights. These developments reflect a broader international shift towards re-evaluating the extent of public access to BO data, with an emphasis on striking a balance between corporate transparency, personal data protection, and national security considerations. In addition, CCM wishes to emphasise that the legal obligations relating to the new BO reporting framework are reinforced by stringent enforcement provisions through the Companies (Amendment) Act 2024 and the Limited Liability Partnerships (Amendment) Act 2024. Any person who knowingly or recklessly provides false or misleading information about a beneficial owner to a company or to CCM commits an offence. Upon conviction, the offender may be liable to a fine not exceeding RM3 million, imprisonment for a term not exceeding 10 years, or both. These provisions are designed to uphold the integrity of the BO reporting framework and ensure that the true individuals who ultimately own or control the companies are not concealed. The enforcement mechanism is essential to ensure compliance with international standards, particularly the FATF recommendations, and to support Malaysia's broader efforts in enhancing corporate transparency and combating financial crimes. As Malaysia subscribes to a multi-pronged approach, where CCM is one of the sources to verify BO information of companies and LLPs, persons who can have access to the BO information have a legal duty to report any discrepancies of the information supplied to them with the information or data obtained by or within the knowledge of those persons. Failure to report such a discrepancy within 30 days from the date of the supply may trigger certain penalties under the Companies Act 2016. CCM is strongly committed to promoting transparency, good governance and regulatory integrity. It welcomes engagement with stakeholders, the media and international bodies to continue improving the effectiveness and credibility of Malaysia's corporate regulatory landscape. The views expressed here are those of the author/contributor and do not necessarily represent the views of Malaysiakini.
South China Morning Post
11-04-2025
- Politics
- South China Morning Post
‘Protect not punish' whistle-blowers, Malaysian corruption watchdog urges
Malaysian whistle-blowers need stronger legal protections, a watchdog said on Friday, following a controversy in which a businessman who exposed alleged corruption in Sabah state was publicly admonished by the country's anti-graft body for going public with his claims. Advertisement Whistle-blowing is risky in Malaysia , owing to restrictive information laws, tight government control over the media, and the threat of criminal or civil charges being levelled against those who come forward with allegations. Albert Tei, a businessman based in Sabah, covertly filmed videos that allegedly show senior state politicians soliciting and accepting bribes. The footage soon went viral, prompting denials from the politicians involved, who accused Tei of releasing the videos as an act of retaliation for not receiving certain government contracts. Our laws must protect – not punish – those who take steps to correct wrongdoing Raymon Ram, Transparency International Malaysia But on Thursday, the Malaysian Anti-Corruption Commission (MACC) announced that Tei did not qualify for legal protection under the Whistleblower Protection Act because he went public with his allegations before formally filing a complaint with the agency.
