Questions of conflict of interest have been raised in the Securities Commission (SC) after documents from a source in the market regulator showed that several directors of the commission also sit on the boards of public-listed companies, MalaysiaNow can reveal.
Although several names cropped up as non-executive directors in these companies, it could point to questions of integrity and conflict of interest as the SC is expected to regulate the same companies in which they have some interest.
In one instance of conflict of interest, Gooi Hoe Soon, who is a director at the SC, also sits on the boards of Yinson Holdings Bhd, Red Ideas Holdings Bhd and Perusahaan Sadur Timah Malaysia Bhd.
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.
Another concern that has been the subject of talk within the business community is one related to the SC chairman himself, Syed Zaid Albar.
Zaid, the brother of former minister Syed Hamid Albar, was appointed as SC chairman in October 2018 under the Pakatan Harapan administration.
Zaid was a director of Yinson Holdings when he was appointed to head the SC, but swapped places in the company with his daughter, Sharifah Munira Syed Zaid.
Munira was named as a non-executive independent chairman of Yinson in January 2020.
Meanwhile, another board member, Lynette Yeow Su-Yin, was found to be a non-executive committee member of CTOS Digital Bhd, a leading credit report company.
“This also raises concerns, because just last year, the SC approved CTOS’ purchase of additional shares in a rating agency,” the source added.
Last year, CTOS raised the company’s stake in RAM Holdings, a ratings agency, to 8.1%, spending an additional RM7.6 million for 350,000 shares.
The SC was established in 1993 as a statutory body under the Securities Commission Act, with wide powers in regulating the capital market.
Apart from ruling over corporate bond issues, securities, futures, company mergers and stocks, the SC also acts as the registrar of company prospectuses.
The revelation of SC members being intertwined with business comes as the body is investigating the ownership of shares by Azam Baki, the head of the Malaysian Anti-Corruption Commission (MACC), and his brother.
Azam has denied the claims made in a series of online articles by Lalitha Kunaratnam, who is linked to C4 Center, a local NGO led by activist Cynthia Gabriel.
The allegations were repeated by Cynthia’s fellow director in C4 Center, Edmund Terence Gomez, who also resigned from MACC’s consultative panel.
While the involvement of SC directors in companies is not prohibited by law, it is likely to raise questions over the extent to which it can remain independent in its main job of capital market regulation.
“The SC has the power to enforce laws related to the capital market, which will have repercussions on a public-listed company,” a prominent businessman said when shown the documents obtained by MalaysiaNow.
“How does having members of the country’s regulatory board in a business not influence the SC’s decisions, even as non-executive directors?
“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,” he quipped.
On Monday, several individuals filed a report against the SC, citing three instances of misconduct and corruption by its directors as well as some senior politicians.
They comprise a case of conflict of interest by a board member totalling RM28.2 million, another involving a family member of a top SC official, as well as another alleging that bribes were given to close an investigation on insider trading against a public-listed company.