AUGUST 6 — In “Tabung Haji RCI findings: CCM must commence investigation” I wrote of the findings of the Tabung Haji Royal Commission of Inquiry (RCI) that bonus payments made by TH Properties in 2017 and 2018 had breached the provisions of Sections 230(2), (3) and (4) of the Companies Act 2016 (Act 777).

These breaches are offences under the Companies Act by reason of Section 230(7).

The authority to investigate is the Registrar of the Companies Commission of Malaysia (CCM), by reason of Section 27D of the CCM Act 2001 (Act 614).

The CCM (Suruhanjaya Syarikat Malaysia — SSM) is a statutory body established through the merger of the Office of the Registrar of Companies (ROC) and the Office of the Registrar of Businesses (ROB). The CCM commenced operations on April 16, 2002.

The CCM ensures compliance with corporate and business laws through, among others, effective enforcement. 

It is entrusted with the administration and enforcement of a number of laws, including the Companies Act:

The CCM has a “Prosecution Section” which registers cases in the courts for offences committed under the Companies Act. It prosecutes cases in the interest of the public at large.

By reason of Section 36 of the CCM Act, however, no prosecution shall be instituted except by or with the consent in writing of the Public Prosecutor.

Another authority to investigate is the police, for offences under the Penal Code.

One such offence is dishonest misappropriation of property under Section 403 of the Penal Code. The provision reads as follows:

“Whoever dishonestly misappropriates, or converts to his own use, or causes any other person to dispose of, any property, shall be punished with imprisonment for a term which shall not be less than six months and not more than five years and with whipping and shall also be liable to fine”.

The actus reus or guilty act of the offence is misappropriation or conversion or causing the disposal of property of another person. 

The essence of the offence is that the property of another person comes into the possession of the accused in some neutral manner and is misappropriated or converted to his own use by the accused.

The ingredients of the offence can be stated as follows:

(a) the property must belong to a person other than the accused;

(b) the accused must have misappropriated property or converted it to his own use; and

(c) there must be dishonest intention on the part of the accused.

(See Law of Crimes by Ratanlal & Dhirajlal (26th Ed), at p 2264)

Bonuses are paid from the property of a company. Under the law, an incorporated company like TH Properties is a separate legal entity distinct from its shareholders and directors.

A company can own property, sue and be sued in its own name, and enter into contracts independently.

In simple words, the property of a company belongs to the company and not to the shareholders and directors.

One of the biggest misconceptions among shareholders and directors, as well as the public, is the belief that because they are shareholders and directors, they own everything the company owns.

A director may drive the company’s vehicle. A shareholder may have invested capital in the company.

But the company’s property belongs to the company.

Not to the directors.

Not to the shareholders.

* This is the personal opinion of the writer or publication and does not necessarily represent the views of Malay Mail.