Regulatory enforcement is key to rebuilding trust in market

SEVERAL years ago, a few Malaysian directors were in town for a conference. As I was driving them to dinner, one of the directors said he had been reprimanded by Bursa Malaysia for breaches of listing rules. Rather coincidentally, that director's phone rang. The call was from his company secretary telling him that the Companies Commission of Malaysia (CCM) required him to go to its office for a meeting about the company for which he had been reprimanded. He complained about being called up by the CCM since he had already been reprimanded by the stock exchange.

I said that just because a director has been sanctioned by the stock exchange does not mean that he will not face further sanctions from statutory regulators. I explained that the stock exchange only sanctions directors for breaches of listing rules, while other statutory regulators may take action for breaches of company law, securities law and other legislation.

I am not sure if what I said affected his appetite.