Say No To Hudud

Thursday, January 6, 2011

Open Letter to Bursa Malaysia

Bursa Malaysia, as a front-line regulator is committed to maintaining high standards of corporate governance (CG) so as to maintain market integrity.  Bursa Malaysia is continuously championing initiatives to promulgate the importance of embracing the best practices of CG with their listed issuers. - Bursa Malaysia

Dear Sirs,

The purpose of the movement behind this blog is to help weed out Corporate Misconduct in this country. And the logical place to start will not be by questioning the actions of individual companies, but by looking at the underlying factor that is common to all companies, good or bad, so that time and effort can be leveraged to the maximum.

The underlying factor is the auditors. There have been no major cases of fraud or breakdown of governance without the auditors being involved in one way or another. The next step is to find the unifying factor that is common to all auditors.

And the factor that unifies all auditors for Public Interest Entities in Malaysia is the Securities Commission via the Audit Oversight Board.

What we have found is that, the Oversight Board for Auditors in Malaysia, the AOB, while borne out of noble and lofty ideals, has not been given a chance to function as a truly independent entity, capable and willing to regulate any and all Auditors to exacting standards due to the actions of a few individuals.

This has resulted in an auditor, namely PwC Malaysia being registered as 'fit and proper' without having to go through the necessary checklist which will show that they really are 'fit and proper'. In fact their registration is a physical and legal impossibility, and brings disrepute to the CG regulatory framework as a whole.

Now, this movement cannot move on to the next investigation until the AOB becomes truly independent and follows the rules that were crafted for it, and it becomes true to its raison d'etre.

Subsequent to that we also have to see some answers from PwC Malaysia itself as to the reasons behind the questionable conduct and fraudulent actions. They audit about 100 listed companies in Malaysia, in fact, 9 out of the 20 top companies in term of capitalisation are audited by PwC. This means a few hundred billion Ringgit, and we would like Bursa to take notice, because we are sure that the shareholders will.

Until we see that things change for the better in the AOB, and all auditors, including PwC Malaysia, are brought into line by them, we cannot move our focus elsewhere.

We do not wish to rain on Bursa's parade at the moment, what with the index making new highs and all, but these questions are not only valid, they are very important as well. Do we actually want to see a case similar to the Satyam/PwC fraud case here?

Bursa Malaysia, in your own words, you are a front line regulator, committed to maintaning high standards of Corporate Governance, in order to maintain market integrity. Please help save the dignity of CG in this country, as we have further irrefutable proof of fraud by PwC Malaysia, and the longer it takes, the harder it is to hold back.

Thank you.

No comments:

Post a Comment