ON June 11, three company directors were held by the Malaysian Anti-Corruption Commission (MACC) on suspicion of involvement in a Tourism Malaysia contract worth RM99 million.
Last year, a former government agency chairman was detained by the MACC on allegations of abuse of power. A contract was said to have been approved in just one day without adhering to procurement regulations.
This, along with the growing number of corruption cases we read, makes us wonder when will it all end. Most of us would regard the public sector as the most corrupted sector. The fact is, it takes two to tango, where the private business sector (who pays) holds the power to corrupt public officials (who get paid) and which also practises corruption widely.
Private sector officials pay bribes to their counterparts from other private sector companies and public sector officials to get their work done. In fact, the private sector is not just a victim of corruption, but also the perpetrator of corrupt practices. Indeed, the private sector is instrumental and often works hand in glove with public officers.
Collusion between internal and external parties is rampant in fraud and corruption cases. This seems to be the modus operandi of fraudsters and white collar criminals because corruption is a win-win situation where both parties to the crime get the benefits.
The Global Infrastructure Anti-Corruption Centre revealed that corruption in relation to private sector projects takes a similar form as in the public sector, but the cost of corruption is not directly borne by public funds. It, nevertheless, can have widespread and serious consequences.
The World Economic Forum confirmed that corruption adds up to 10 per cent to the total cost of doing business globally, while PricewaterhouseCoopers Global Economic Crime and Fraud Survey 2020 (PwCs 2020) stated that US$42 billion is the total fraud losses reported by respondents.
Based on KPMG's 2013 Fraud, Bribery and Corruption Survey, 90 per cent of respondents said bribery and corruption were the biggest problem for businesses in Malaysia. According to PwC's 2020 survey, the number of economic crimes experienced by respondents has risen to 43 per cent, compared with 41 per cent in 2018.
In one press conference, the MACC expressed concern about bribery and corruption among businesses and considered it "an alarming issue". PwC's 2020 survey states that fraud in Malaysian organisations remains at worrying levels.
Procurement fraud is seen as high in the private sector, which involves billions of ringgit for each procurement. White elephant purchases are common, especially in the purchase of medical devices, construction, telecommunications, education and defence sectors.
Corruption in the private sector has been the focus of the MACC and other institutional reform. Corrupt behaviour, such as insider dealing and bribes to secure private contracts, has recently been more widely investigated and perpetrators charged.
MACC director of investigation division Datuk Norazlan Mohd Razali foresees there will be more reports on corruption in commercial organisations under Section 17A of the MACC Act 2009. The penalty for corporate liability under Section 17A (2) for the corruption offence shall be a fine of not less than 10 times the value of the gratification in question or RM1 million, whichever is higher or a maximum of 20 years' imprisonment, or both.
This penalty is much higher compared with the financial penalty for a bribery offence, which is a fine of not less than five times the value of the gratification in question or RM10,000, whichever is higher and no imprisonment.
Sentences imposed should not only punish the offender but should also be a lesson for others not to commit the offence. Heavier punishment will make everyone see that receiving bribes will surely lead to the ruin of not only the bribe-taker but his or her entire family as well.
Judges should use all the provisions in the act when passing the sentence which should include maximum imprisonment, whipping and forfeiture of illegally amassed wealth where the combination will serve as a good lesson to the criminals. A heavier penalty can become a greater deterrent against corruption if it is used along with longer imprisonment.
The writer is President of the Malaysia Association of Certified Fraud Examiners
The views expressed in this article are the author's own and do not necessarily reflect those of the New Straits Times