Friday 29 Mar 2024
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This article first appeared in The Edge Financial Daily on July 13, 2017

KUALA LUMPUR: The Securities Commission Malaysia (SC) continues to welcome China-based companies to list on Bursa Malaysia despite claims of bad corporate governance and fraudulent practices made against some Chinese firms.

SC chairman Tan Sri Ranjit Ajit Singh said there should be no issue for the companies to list in Malaysia as long as they meet the requirements set by Bursa and the SC.

“Our position will always be that any company that wants to list must meet all our requirements. And [we are] not specifically targeting any company; it’s a general approach that we take,” Ranjit told The Edge Financial Daily on the sidelines of the International Corporate Governance Network (ICGN) Annual Conference yesterday.

“We have a lot of Chinese companies that come to list here, but at the end of the day, assessments are made [based on] the criteria which foreign companies abide by, including the role of advisers,” said Ranjit.

He added that the SC will also work with the Chinese regulator — China Securities Regulatory Commission — if any action needs to be taken in this regard.

When asked for his thoughts on Chinese firms not scoring high in terms of corporate governance, Ranjit said: “I’m not in a position to specifically comment on corporate governance rankings. [However,] what we are most keen on is [that] any company that comes to our [stock] exchange must fulfil the relevant requisite requirements, including for corporate governance.”

Meanwhile, in his keynote speech at the conference yesterday, Ranjit urged businesses to prioritise value creation that is sustainable in the long run rather than focus on short-term earnings.

He described this approach as a form of corporate thinking which considers circumstances that go beyond typical businesses’ concerns, in line with ICGN’s principles.

“It has always been the case that businesses, large and small, bear within them the innate ability to exercise impact on a wide variety of stakeholders beyond that of shareholders. The direction of this ‘impact’ is therefore greatly dependent upon the actions of businesses steered through the internalisation of good corporate governance,” said Ranjit.

The SC chief said it is high time to stress good corporate governance as there is a trust and confidence crisis from the public arising from disparaging income inequality and surging costs of climate change, which give way to economic nationalism and populist movements across various countries around the world.

Moving forward, Ranjit noted that the SC has formulated strategic considerations in adopting a carefully calibrated and non-reactive approach to corporate governance.

For instance, he said, the SC recognises the importance of incubating good governance practices among nascent small and medium enterprises, while continuing to leverage technology to enhance internal governance compliance and practices.

Ranjit said that later this year, Malaysia will be introducing the Institute of Corporate Directors Malaysia, a key benchmark effort to strengthen board effectiveness in public listed companies.

The three-day conference ending today — hosted by the Retirement Fund (Incorporated) in partnership with the Minority Shareholder Watchdog Group — gathers institutional investors from around the world, to examine best practices in corporate governance obligations, policies and processes, to enhance overall financial market stability and economic growth.

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