KUALA LUMPUR (April 20): The Securities Commission (SC) has, towards the end of last year and the first quarter of this year, observed that there were some governance lapses in Bursa Malaysia, according to its chairman Datuk Syed Zaid Albar.
“This was not unnoticed by the industry which raised many queries on the manner in which Bursa was being managed, in particular, the exercise of executive powers by the non-executive chairman,” StarBiz wrote, citing an email to SC’s board members it sighted.
The email was sent to explain the reasons behind the removal of Datuk Shireen Ann Zaharah Muhiudeen as Bursa chairman.
This came after Bursa announced last week that Tan Sri Abdul Wahid Omar will be its new non-executive chairman, following the retirement of Shireen, which confirmed a report by The Edge that said Wahid's appointment is by the Minister of Finance, as stipulated under the Capital Markets and Services Act 2007, and will take effect on May 1.
Shireen will be stepping down from her role by the end of this month (April 30), after nearly four years from 2015.
StarBiz wrote that Syed Zaid said he was called by former powers of Putrajaya in the first quarter of this year to explain the SC’s position on the regulatory submission following a letter written by Shireen asking for political intervention.
Both the SC and the Ministry of Finance (MoF) then received a letter from Bursa attaching political approval for the appointment of new directors to its board, said Syed Zaid.
“We view such conduct as a serious breach of good corporate governance,” he explained, adding that involving parties outside the statutory powers of MoF and the SC was pre-emption of their statutory powers.
He said several public interest directors (PIDs) have also voted to file a judicial review (JR) against the SC and MoF’s decision on the regulatory submission.
“Filing of the JR would have serious repercussions on investor confidence in the capital market, its regulator and the MoF. The failure of the PIDs to give due consideration to these factors render them in our view, no longer fit and proper to be a PID,” he explained.
On March 11, the SC wrote to the board of Bursa expressing its concerns on the role of Shireen, who it felt had over-reached into executive roles.
“This compromises the checks and balance which the non-execs provide to oversee management’s decisions,” he said.
On March 17 and April 3, Syed Zaid said the SC wrote to the MoF regarding the renewal of several Bursa board members.
“In these letters, SC also highlighted its concerns to MoF with regards to the lack of fit and properness of two PIDs (including Shireen) and had proposed that she and another PID be replaced,” he said.