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.

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