Country Analyses, Second Edition
Edited by Christine A. Mallin
Chapter 12: Corporate governance in Malaysia: the macro and micro issues
Mohammad Rizal Salim INTRODUCTION Malaysia was formed in 1963. It comprises Peninsula Malaysia (Malaya or Tanah Melayu, which gained independence from the British in 1957), Sarawak, Sabah (British North Borneo) and Singapore (ceded in 1965). As with other British colonies, Malaysia adopted British legal and political institutions, systems of laws and government, substantive and procedural laws, as well as many aspects of her legal culture. The main regulator of companies is the Companies Commission of Malaysia. The primary legislation governing companies is the Companies Act 1965. It is based on the UK Companies Act of 1948, with some modifications following the Australian Uniform Companies Act 1961. This is supported by the Capital Markets and Services Act 2007 (replacing the Securities Industries Act 1983 and the Futures Industry Act 1993) and the Securities Commission Act 1993, which regulate public companies and the capital market. These are supplemented by various subsidiary legislation, codes and guidelines, including the Malaysian Code on Takeovers and Mergers 1998 and the Guidelines on the Regulation of Acquisition of Assets, Mergers and Takeovers. Bursa Malaysia’s (formerly Kuala Lumpur Stock Exchange) Listing Requirements apply to all listed companies. The Malaysian Code on Corporate Governance was introduced in 2000 (revised in 2007). It adopts the ‘comply or explain’ approach currently preferred in many other parts of the world. Malaysia’s political and legal institutions, as well as her regulatory regime, are comfortingly close to those in the UK. However, a term which may best describe Malaysia is that of a ‘syncretic’...
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