The enforcement powers of the Securities Commission (SC) on corporate governance transgressions will be strengthened, says Prime Minister Datuk Seri Najib Razak.
The SC will be empowered to take action against a director or officer who causes “a wrongful loss to a public listed company (PLC) or its subsidiary to the detriment of the PLC”.
The SC will also be able to prevent the dissipation of assets of a PLC by those managing the company. An independent Auditor Oversight Board will be set up.
This is among a slew of changes made to raise Malaysia’s attractiveness as a listing destination.
Going forward, the public spread requirement remains and in addition, the SC will introduce a new guideline that requires companies seeking listing to offer 50% of the public shareholding spread to bumiputra investors.
“The bumiputra equity condition, therefore, becomes subsumed with the public spread requirement,” Najib said.
This would make it easier to raise funds from the capital markets and post-listing fund raising exercises would no longer be subject to any equity condition, he said.
This would immediately support existing listed companies seeking to raise funds to undertake investments and reduce the friction cost of compliance.
Earlier in his speech, the Prime Minister said greater internationalisation was needed for the next phase of the development of the country’s capital markets.
“This is inevitable and is an integral aspect of a high-income strategy,’’ he said. “We have become a successful middle-income economy. But we cannot and will not be caught in the middle-income country trap.”
The Prime Minister said the country had to make the shift to a high-income economy or risk losing growth momentum in economies and vibrancy in the markets.