THE Securities Commission will contact Malaysian Anti-Corruption Commission (MACC) chief commissioner Azam Baki for an explanation concerning claims that his brother used his trading account to purchase shares.

The regulator in a statement said it will “be in touch with the parties involved for an explanation and to verify statements made, as well as gather any relevant evidence”.

Azam yesterday told the media that he allowed his brother, Nasir, to use his trading account to purchase shares from two companies.

However, the shares were later transferred to Nasir, he added.

Sungai Buloh MP R. Sivarasa raised this issue in Parliament on December 14, asking whether Azam declared the alleged 2.15 million shares owned in Excel Force MSC Bhd in 2015, as well as the 1.93 million shares in Gets Global Bhd the same year and 1.02 million shares the following year.

Azam said he informed his superiors about his brother’s purchase of shares in 2015, adding that no concern was raised.

The Securities Commission said under section 25 of the Securities Industry (Central Depositories) Act 1991 (Sicda), every securities account opened with a central depository must be in the name of the beneficial owner of the deposited securities or an authorised nominee.

“In addition, section 29A of Sicda stipulates that all dealings in securities shall be effected only by the beneficial owner of the securities or an authorised nominee.”

A stock broker, who did not want to be named, said it is illegal to perform shares transactions using another person’s trading account unless a declaration was made beforehand.

“No, (it is not legal) unless there is a declaration,” he told The Malaysian Insight when asked whether it is legal to purchase shares using another person’s trading account.

He said the Companies Commission of Malaysia has issued a framework on Beneficial Owner (BO).

“Section 56 of the Companies Act 2016 provides a general framework for companies to obtain BO information from shareholders.

“Section 56’s underlying principle is to empower companies to request BO information from shareholders and record such information in a separate part of the register of members.”

Company secretaries can then issue a notice to shareholders, especially controlling shareholders, to declare whether a person is acting on behalf of the BO, he added.

There have been past cases where central depository system owners have been slapped with compounds for allowing another person to use their accounts to trade shares.

MACC’s Anti-Corruption Advisory Board has cleared Azam of any wrongdoing, but lawmakers and lawyers have called for further investigation as the board alone cannot clear him of any wrongdoing.

The latter questioned whether the chief commissioner satisfies the criteria on asset declaration based on a government circular requiring civil servants to declare their assets, and whether he has come into any potential conflict of interest regarding investigation into companies in which he was a shareholder. – January 6, 2022.