Be brave in advising directors, company secretaries told

Headline: Be brave in advising directors, company secretaries told
Publication: NST
Date of publication: Jul 9, 2011
Section heading: Business Times
Page number: 004
Byline / Author: By June Ramlee

KUALA LUMPUR: Company secretaries should be brave in advising directors to always abide by the law, Companies Commission of Malaysia (SSM) chief executive officer Datuk Azmi Ariffin said.

They should update themselves with the latest information, Azmi added.

He cited the Court of Appeal's decision on June 16 to uphold the High Court conviction order on a company secretary in the case of Ho Woon Choon vs Public Prosecutor, as an example.

"This is a landmark decision, which has created a precedent where the three-member panel of the Honourable Court of Appeal Judges unanimously agreed with SSM prosecutor's submission that the information contained in Form 24 is false and that the company secretary has knowledge of the falsity.

"The false statement in this case was in relation to the declaration that the allotment of new shares was fully paid," he said in his speech at the opening of the two-days conference themed "Governing Responsibility: Inevitable Changes!" organised by the Malaysian Institute of Chartered Secretaries and Administrators (MAICSA) on Monday.

As a result of the conviction, the company secretary is disqualified from holding any directorship post for five years and from acting as a company secretary in Malaysia, pursuant to sections 130 and 139C of the Companies Act 1965 respectively.

"SSM hopes that this decision will send out a clear message that officers of companies in Malaysia have a great responsibility and they have to discharge their functions professionally and with high integrity.

"In this context, SSM will continue its efforts to encourage and promote proper conduct among directors, secretaries, managers and other officers of a company in Malaysia," he said.

He added that SSM is in the midst of proposing a Companies Bill that requires companies to hire qualified persons as their secretaries in the near future.

"This is a clear signal that denotes the importance of a company secretary's role in the corporate legal framework. At the same time, we also acknowledge that directors must be allowed to act as company secretaries in private companies if the company decides to do so.

"This approach is in line with the principle that directors are ultimately responsible for the company's governance affairs," he added.