Major Bribery and Corruption Cases in Malaysia

Combating corruption has increasing risen to the top of policymakers and company agendas. Despite the fact that it has long been a prevalent issue, there is a greater awareness of the negative implications of corruption on both social and economic development. Malaysia has a history of implementing measures to tackle corruption and bribery, with cases occurring for the past four decades and no indication of it slowing. Cases such as the Sabah Water Department, 1MDB, Port Klang Free Zone (PKFZ) and Immigration Department Scandal in 2018 illustrate how corruption and bribery are embedded within Malaysia’s political and government institutions. As such, efforts must be made to tackle it effectively, with evidence suggesting that the increasing number of agencies which aim to do so are failing. However, the adoption of newly devised measures such as the introduction of corporate liability for corruption offences coming into effect in June could be a turning point for tackling corruption and bribery within Malaysia.

Increased efforts have been made to combat corruption, both nationally, regionally and globally due to the growing concern regarding its increasing incidence and negative implications. As a result of the extensive nature of corruption and bribery, the World Bank once identified it as one of the key barriers to social and economic development. Corruption is regarded as a complex, multifaceted phenomenon. Nevertheless, it is widely defined as the abuse of public power and violation of rules for private gains. Whilst there is a perception that it is carried out primarily by government officials, this issue can take place across a range of sectors and be executed by those other than government officials. Forms of corruption which take place include bribery, extortion, fraud, embezzlement, blackmail, illegal gambling, laundering and nepotism, all in which encompass the abuse and misuse of public power and authority. This includes public officials taking or offering bribes through money or service which is dishonest. Subsequently, it is often the abuse of trusted power for the benefit of personal gain. It is considered as a consequence of poor governance and undermines the legitimacy of the state.

Click here to read our full ABAC® article.[/vc_column_text][accordion_father][accordion_son clr=”#ffffff” bgclr=”#1e73be” title=”Let’s Talk!”]If you have any further questions or interest in implementing compliance solutions, please contact us.

CRI Group has safeguarded businesses from any risks, providing investigations (i.e. insurance fraud), employee background screening, investigative due diligence, business intelligencethird-party risk management, forensic accounting, compliance and other professional investigative research services. In 2016, CRI Group launched Anti-Bribery Anti-Corruption (ABAC®) Center of Excellence – an independent certification body established for ISO 37001:2016 Anti-Bribery Management Systems, ISO 19600:2014 Compliance Management Systems and ISO 31000:2018 Risk Management, providing training and certification. ABAC® operates through its global network of certified ethics and compliance professionals, qualified auditors and other certified professionals. Contact ABAC® for more on ISO Certification and training.[/accordion_son][accordion_son clr=”#ffffff” bgclr=”#1e73be” title=”Meet our CEO”]Zafar I. Anjum, is Group Chief Executive Officer of CRI Group (www.crigroup.com), a global supplier of investigative, forensic accounting, business due diligence and employee background screening services for some of the world’s leading business organisations.  Headquartered in London (with significant presence throughout the region) and licensed by the Dubai International Financial Centre-DIFC, the Qatar Financial Center-QFC, and the Abu Dhabi Global Market-ADGM, CRI Group safeguards businesses by establishing the legal compliance, financial viability, and integrity levels of outside partners, suppliers and customers seeking to affiliate with your business. CRI Group maintains offices in UAE, Pakistan, Qatar, Singapore, Malaysia, Brazil, China, USA, and the United Kingdom.

Contact CRI Group to learn more about its 3PRM-Certified™ third-party risk management strategy program and discover an effective and proactive approach to mitigating the risks associated with corruption, bribery, financial crimes and other dangerous risks posed by third-party partnerships.

 

CONTACT INFORMATION

Zafar Anjum, MSc, MS, CFE, CII, MICA, Int. Dip. (Fin. Crime) | CRI Group Chief Executive Officer

37th Floor, 1 Canada Square, Canary Wharf, London, E14 5AA United Kingdom

t: +44 207 8681415 | m: +44 7588 454959 | e: zanjum@crigroup.com[/accordion_son][accordion_son clr=”#ffffff” bgclr=”#1e73be” title=”Speak up – report any illegal, unethical, or improper behaviour”]If you find yourself in an ethical dilemma or suspect inappropriate or illegal conduct, and you feel uncomfortable reporting through normal channels of communication, or wish to raise the issue anonymously, use CRI Group’s Compliance Hotline. The Compliance Hotline is a secure and confidential reporting channel managed by an independent provider. When reporting a concern in good faith, you will be protected by CRI Group’s Non-Retaliation Policy.[/accordion_son][/accordion_father][/vc_column][/vc_row]

How to demonstrate “Adequate Procedures” in Malaysia?

Adequate Procedures in Malaysia, how to demonstrate it?

Adequate procedures in Malaysia are the guidelines issued by the Malaysian Anti-Corruption Commission (MACC). It also is a term made popular through the UK Bribery Act of 2010. It presents a company’s potential to avoid liability for failing to prevent bribery if that organisation can fully demonstrate clear, sound and established policies and procedures that deter individuals (inside and outside of the organisation) from partaking in questionable or corrupt conduct.

Malaysian National Anti-Corruption Plan 2019-2023

Under Section 17A (3) of the Malaysian Anti-Corruption Commission, if the commercial organisation is found liable under the corporate liability provisions, a person who is the director, controller, officer or partner of the organisation, or a person who is concerned with the organisation’s management affairs at the time of the commission of an offence, is deemed to have committed that offence unless such person can prove that the corrupt act was committed without his consent or connivance and that he exercised due diligence to prevent that commission of the offence as he ought to have exercised with regard to the nature of his function in that capacity and the circumstances.

Hence, there is a need for the company to put in place “adequate procedures” as a defence in case there is proven corruption by the associated individual.  The Malaysian Anti-Corruption Commission MACC has issued guidelines that constitute “adequate procedures.” In the National Anti-Corruption Plan, Tun Dr Mahathir bin Mohamad, Prime Minister of Malaysia on 29th January 2019 developed initiative number 2.1.3 which seeks

To introduce Anti-Bribery Management System (ABMS)MS ISO 37001 certification in all Government agencies”  within two years (Jan 2019-Dec 2020).

The guidelines further state in initiative 6.2.4:

To propose Anti-Bribery Management System (ABMS) MSISO 37001 certification as a requirement for State-Owned Enterprises (SOEs), Company Limited By Guarantee (CLBG) and the private sector to bid for Government contracts”.

In complying with these guidelines and to prove “adequate procedures”, public and private sector organisations should implement the ISO 37001 certification process which would provide proper assurance that the organisation has succeeded in establishing, implementing, maintaining, reviewing and improving its Anti-Bribery Management System.

State of Corruption in Malaysia

In Malaysia, apathy and ignorance towards bribery and corruption in your business will personally cost you. Malaysia’s seemingly never-ending battle to combat bribery and corruption took a decidedly different turn on June 1st of this year, as specific measures go into effect that saddle corporations and other organisations – along with their directors, controllers and senior management – with the full burden of proving that they are not involved in allegations of corrupt activity by their employees and third-party partners. That burden of proof means that corporations will have to effectively demonstrate that policies and procedures are firmly in place that deters, detect and defend against incidences of bribery at all levels of the organisation.

While a large part of the political and economic universe still believes that engaging in some form of corruption is the only way to survive and advance, many countries now are taking drastic measures to root out corruption, and Malaysia is rushing to the forefront of that trend. Currently ranked at 51 out of 180 countries on Transparency International’s “Corruption Perception Index” (2019), with a score of 53 (where 0 is perceived to be highly corrupt and 100 is perceived to be very clean), the Malaysian government emerged from the highly publicized 1MDB financial scandal on high alert and with a firm resolve to adopt tough anti-corruption legislation as one of its main priorities.

The result was the empowerment of the Malaysian Anti-Corruption Commission (MACC) and its 2009 Act which addressed corruption on both the political and private sector levels.  The Parliament’s subsequent amendment – Section 17A – was added in 2018, which likened the legislation to the UK Bribery Act but added a “parallel” element of personal criminal liability in corporate bribery cases. And that’s where business organisations need to take notice and take immediate action.

Demonstrating “Adequate Procedures” through ISO 37001 Certification

ISO 37001 Anti-Bribery Management System is an internationally accepted standard that specifies the procedures by which an organisation should implement in preventing bribery while detecting and reporting any bribery incident that occurs. The standard requires organisations to implement these procedures on a reasonable and proportionate basis according to the type and size of the organisation, and the nature and extent of bribery risks faced. It applies to small, medium and large organisations in the public and private sector and can be implemented in any country. Though it will not provide absolute assurance that bribery will completely cease, the standard can help establish that the organisation has in place reasonable, proportionate and adequate anti-bribery procedures.

ABAC® Center of Excellence Limited is fully accredited as a Conformity Assessment Body (Certification Body) to assist your organisation in attaining ISO 37001 certification through a thorough bribery risk assessment and audit covering the entire scope of the standard The audit methodology is evidence-based, meaning any issues raised will be confirmed through adequate evidence that the ABAC® Certification team has discovered during the audit. Auditing techniques take a risk-based approach to examining your organisation’s Anti-Bribery Management System (ABMS), and the ABAC® Certification team will increase the scale of the investigation if they determine that a specific process presents a higher risk side.  Factors such as Impact, Negligence, Minor, Major, and Critical are taken into consideration during the audit.

A separate audit method is a process-based approach where the ABAC® Certification examines the organisation’s processes while considering the interaction between those processes.  Finally, there is a sampling-based audit approach where ABAC® Certification incorporates an appropriate sampling plan utilising samples from different ABMS processes to conclude and support the audit findings and results.

The audit is extremely thorough in its approach, which results in accredited certification for the scope of the ISO 37001 Anti-Bribery Management System.  Because of the standard’s international acceptance and the thoroughness of the audit process, such certification can provide a valuable safeguard in demonstrating an “adequate procedures” compliance defence in cases posing a liability for a company’s failure to prevent bribery. Indeed, from an FCPA perspective, certification may provide tangible evidence that a compliance program was in place at the time of the alleged bribery actions. And from a UK Bribery Act perspective, the certification could provide the company with tangible prima facie evidence presented by an accredited certification body attesting to the establishment and effectiveness of the organisation’s compliance program. Notably, per Section 17A of the Malaysian Anti-Corruption Commission, the Prime Minister’s National Anti-Corruption Plan 2019-2023 has declared ISO 37001 certification a requirement for companies operating in Malaysia.

There is a strong likelihood that ISO 37001 Anti-Bribery Management System will continue to set the pace for a globally recognised “adequate procedures” standard for corporations embroiled in corruption litigation proceedings. But for now, the most powerful “insurance” tool that public and private sector organisations can use in their defence strategy is ISO 37001 ABMS certification.

 

About CRI Group

Based in London, CRI Group works with companies across the Americas, Europe, Africa, Middle East and Asia-Pacific as a one-stop international Risk Management, Employee Background Screening, Business IntelligenceDue Diligence, Compliance Solutions and other professional Investigative Research solutions provider. We have the largest proprietary network of background screening analysts and investigators across the Middle East and Asia. Our global presence ensures that no matter how international your operations are, we have the network needed to provide you with all you need, wherever you happen to be. CRI Group also holds BS 102000:2013 and BS 7858:2012 Certifications, is an HRO certified provider and partner with Oracle.

In 2016, CRI Group launched the Anti-Bribery Anti-Corruption (ABAC®) Center of Excellence – an independent certification body established for ISO 37001:2016 Anti-Bribery Management Systems, ISO 19600:2014 Compliance Management Systems and ISO 31000:2018 Risk Management, providing training and certification. ABAC® operates through its global network of certified ethics and compliance professionals, qualified auditors and other certified professionals. As a result, CRI Group’s global team of certified fraud examiners work as a discreet white-labelled supplier to some of the world’s largest organisations. Contact ABAC® for more on ISO Certification and training.

CRI Celebrates 28 Years with a Trip to Thailand

2018 has been a big year for CRI Group, a global leader in Risk, Compliance and Anti-Corruption Management Systems. First, the firm was granted accreditation by the Emirates International Accreditation Centre (EIAC) as an ISO 37001:2016 Anti-Bribery Management System Certification and Conformity Assessment Body (the first accreditation of its kind awarded to a certification body specialising in global anti-bribery and anti-corruption, risk and compliance standards).

Then, CRI Group proudly announced that it will host its Anti-Bribery Summit 2018 in Kuala Lumpur, Malaysia – following the success of last year’s inaugural event. The two-day summit offers expert training and the sharing of best practices for fighting bribery and corruption.

Following both of these major announcements, more than 20 CRI Group employees gathered in Bangkok, Thailand to celebrate the company’s 28th anniversary. CRI Group organised the trip to help employees connect, share in their achievements together, and enjoy all of the sights, sounds and great cuisine of Thailand in the ultimate team building trip.

CRI Group: A Brief History

CRI Group was originally founded as the “Metropolitan Detective Agency” by Mr. Muhammad Anwar Naveed, the father of CRI Group CEO Mr. Zafar I. Anjum. It was a one-man private investigation firm that dealt with insurance claim investigations. In 1990, Mr. Zafar Anjum (a former member of the Pakistan Rangers who had earned a Graduate Diploma from Pakistan Detective Training Institute PDTI) formally launched the business as a full flagged district level detection agency with a full range of services including insurance claim fraud investigations, background checks and due diligence.

While working one insurance fraud case in particular, Mr. Zafar Anjum realised that a certain aspect of the affair struck him: Whereas most types of crime are dealt with by the justice system, fraud is peculiar in that it often mandates investigation by an external agency or organisation which specialises in fraud detection.

“I noticed that such organisations were sorely lacking in Pakistan at the time – and that there was a distinct lack of counter fraud education in the general population, which aided those committing fraud greatly”, Mr. Zafar Anjum said. “Furthermore, even where individuals were aware that they were being defrauded, they lacked the knowledge of how to effectively resolve disputes between themselves and the defrauder. Therefore we started a very first corporate investigation company in Pakistan specialising in Fraud Risk Investigations, Risk Consulting and Compliance solutions”.

Mr. Zafar Anjum raised the firm to a new level in 2001 when he incorporated and registered it in Pakistan as a Private Limited Company with a new name: Corporate Research and Investigations (Private) Limited, offering full-scale investigative research services. Corporate Research and Investigations Limited was incorporated in 2006 in the UK, and Corporate Research and Investigations LLC DIFC was incorporated in 2008 in UAE. Today, the company stands as a leader in employee background screening services, investigative due diligence, third-party risk management services and Anti-bribery Management Systems. CRI Group safeguards some of the world’s leading businesses by establishing the legal compliance, financial viability and integrity levels of outside partners, suppliers and customers seeking for affiliation.

Currently based in London, UK, CRI Group is a global firm with experts and resources located in key regional marketplaces across the Asia Pacific, South Asia, the Middle East, North Africa, Europe and North America. The company’s success and growth continues, as it recently expanded into North and South America and Asia while opening three new branches: Toronto (Canada), São Paulo (Brazil) and Shanghai (China).

ABAC® Center of Excellence

While reflecting on CRI Group’s history, Mr. Zafar Anjum said the recent EIAC accreditation is a major milestone and a result of the commitment and hard work of the entire team. CRI Group administers ISO 37001:2016 Anti-Bribery Management System Certification through its Anti-Bribery and Anti-Corruption ABAC® Center of Excellence, which it launched in October of 2016.

“It is a special honour to be the very first accredited conformity assessment body in Middle East, Asia and the UK”, Mr. Zafar Anjum said. “This accreditation is a testament to the expertise of our global network of audit specialists and the result of 28 years providing high-level risk management and compliance solutions to organisations worldwide seeking to combat the detrimental effects of bribery and corruption”.

CRI Group’s ABAC®  Center of Excellence was created to educate, equip and support the world’s leading business organisations with the latest in best-practice due diligence processes and procedures, providing world-class anti-bribery and anti-corruption solutions to organisations seeking to validate or expand their existing compliance frameworks to maintain a competitive edge in the world marketplace.

“We are striving to ensure compliance and ethics being best practices for companies and their third-party relationships, and we believe this is a very best defence against all corporate malpractices”, said Mr. Zafar Anjum.

A Time to Celebrate

The idea for the meeting in Thailand grew from CRI Group’s achievements, and also the company’s focus on human connection as the key to career success, recognising the positive attitudes and encouraging efforts of all employees that help lead the company to new heights year after year. The trip to Thailand was an enthusiastic “thank you” for their hard work.

 The group was made up of 22 CRI Group employees from various worldwide locations. They were joined by Mrs. Kanwal Zafar, wife of Mr. Zafar Anjum, as they gathered in Bangkok for four days. They also visited Pattaya, took a trip to the Coral Island, took a cruise in the river and enjoyed Thai food, culture and each other’s company. As one of the most important aspects of the trip, they engaged in several team building activities to strengthen rapport and communication.

Dubai-based CRI Group employee Ayesha said: “We had an amazing time in Thailand to celebrate our achievement of accreditation by EIAC. I wish for CRI Group to have more success ahead so that lots of such trips come our way!”

Austeja, who is based in the UK, said: “The best thing is that we met each other. We do communicate internally a lot, but never met each other in person. I believe from now on, our communication will be even more effective and the bonds we built will help the company to reach even higher goals”.

Muhammad, from Pakistan office, mentioned: “It was my first trip abroad and it was a very peaceful and enjoying journey to Thailand with CRI Family. Very effectively and thoroughly planned by HR and Admin department. Must say a very well-done job.  Thanks to Sir Zafar and Mam Kanwal for such a memorable trip.”

HR manager Ayesha concludes: “On this auspicious event, I would like to congratulate Mr. Zafar Anjum who have set the foundations of this company 28 years back and worked hard day in and day out to reach heights of success. And this 28th anniversary is very special for all of us as we have achieved EIAC accreditation in this year and we are an Accredited CB for the scope of ISO 37001:2016 ABMS. It is rightly said, and I quote: “Celebrate what you have accomplished, but raise the bar a little higher, each time you succeed”.”

Congratulations to Mr. Zafar Anjum and all CRI Group employees for an anniversary to remember!