Malaysia: First prosecution under the new Section 17A corporate liability regime

In brief

The Malaysian Anti-Corruption Commission (MACC) has charged a company and its director under the new corporate liability offence in connection with a count of bribery worth RM 321,350 paid to secure a subcontract.

This marks the first case under the new corporate liability regime and clearly demonstrates the MACC's commitment in enforcing the corporate liability offence under Section 17A of the Malaysian Anti-Corruption Commission Act 2009 ("Section 17A"), which recently came into force on 1 June 2020. 

In light of this, commercial organisations are urged to take immediate steps to ensure that they have in place "Adequate Procedures" as a statutory defence against an offence under Section 17A.


For the Japanese version click here (日本語版). 

In depth

An offshore maintenance company has become the first company to be charged under the new Section 17A. In its press statement on 17 March 2021, the MACC confirmed that it had called the current director of the company in for further investigations in connection with an alleged bribe paid to ensure that the company was awarded a subcontract.

On 18 March 2021, it was reported that the company has been charged under Section 17A. The said bribe was allegedly committed between 29 June and 14 October 2020, after Section 17A came into force.

Under Section 17A, a commercial organisation commits a criminal offence if a person associated with it corruptly gives any gratification with intent to obtain or retain any business or advantage for the commercial organisation. The offence comes with a hefty penalty of a fine not less than 10 times the value of the bribe or RM 1 million, whichever higher, and/or maximum imprisonment of 20 years.

Additionally, if convicted, the commercial organisation's directors, controllers and management will be presumed to be guilty of the same offence unless proven otherwise.

The only statutory defence available is for the commercial organisation to prove that it has in place "Adequate Procedures" designed to prevent persons associated with it from committing the corrupt acts.

This comes as a timely reminder to all commercial organisations to take immediate steps to  implement robust compliance programmes with "Adequate Procedures" in order to avail themselves to the statutory defence under Section 17A.

* * * * *

LOGO Malaysia_Wong & Partners_KualaLumpur

This client alert was issued by Wong & Partners, a member firm of Baker McKenzie International, a global law firm with member law firms around the world. In accordance with the common terminology used in professional service organizations, reference to a "partner" means a person who is a partner or equivalent in such a law firm. Similarly, reference to an "office" means an office of any such law firm. This may qualify as "Attorney Advertising" requiring notice in some jurisdictions. Prior results do not guarantee a similar outcome. 

Contact Information

Copyright © 2023 Baker & McKenzie. All rights reserved. Ownership: This documentation and content (Content) is a proprietary resource owned exclusively by Baker McKenzie (meaning Baker & McKenzie International and its member firms). The Content is protected under international copyright conventions. Use of this Content does not of itself create a contractual relationship, nor any attorney/client relationship, between Baker McKenzie and any person. Non-reliance and exclusion: All Content is for informational purposes only and may not reflect the most current legal and regulatory developments. All summaries of the laws, regulations and practice are subject to change. The Content is not offered as legal or professional advice for any specific matter. It is not intended to be a substitute for reference to (and compliance with) the detailed provisions of applicable laws, rules, regulations or forms. Legal advice should always be sought before taking any action or refraining from taking any action based on any Content. Baker McKenzie and the editors and the contributing authors do not guarantee the accuracy of the Content and expressly disclaim any and all liability to any person in respect of the consequences of anything done or permitted to be done or omitted to be done wholly or partly in reliance upon the whole or any part of the Content. The Content may contain links to external websites and external websites may link to the Content. Baker McKenzie is not responsible for the content or operation of any such external sites and disclaims all liability, howsoever occurring, in respect of the content or operation of any such external websites. Attorney Advertising: This Content may qualify as “Attorney Advertising” requiring notice in some jurisdictions. To the extent that this Content may qualify as Attorney Advertising, PRIOR RESULTS DO NOT GUARANTEE A SIMILAR OUTCOME. Reproduction: Reproduction of reasonable portions of the Content is permitted provided that (i) such reproductions are made available free of charge and for non-commercial purposes, (ii) such reproductions are properly attributed to Baker McKenzie, (iii) the portion of the Content being reproduced is not altered or made available in a manner that modifies the Content or presents the Content being reproduced in a false light and (iv) notice is made to the disclaimers included on the Content. The permission to re-copy does not allow for incorporation of any substantial portion of the Content in any work or publication, whether in hard copy, electronic or any other form or for commercial purposes.