China - Pakistan - Malaysia - India - Indonesia - Corporate Crime Update.
Legal News & Analysis – Asia Pacific - China - Pakistan - Malaysia - India - Indonesia - Regulatory & Compliance - White Collar Crime
18 October, 2015
CHINA FORBIDS PUBLIC FUND SPENDING FOR GIFTS DURING PUBLIC HOLIDAYS
Ahead of the Mid-Autumn Festival and Golden Week holiday in China (September 27 and the first week of October), Chinese anti-graft agencies warned public officials that spending public funds on any gifts (including mooncakes) or banquets during holidays is strictly forbidden. The media has been encouraged to expose any such violation.
FORMER CHAIRMAN OF STATE OWNED STEEL CORPORATION BEING INVESTIGATED
Qilin Deng, the former Chairman of Wuhan Iron Corporation, is being investigated for “serious violations of discipline and law", according to a statement by China's anti-corruption authorities. It is reported that Qilin and his family allegedly used company resources to pursue illegal interest for themselves.
DEPUTY CHAIRMAN OF NATIONAL SPORT AUTHORITY ARRESTED FOR BRIBERY
Tian Xiao, the deputy Chairman of China State General Administration of Sports has been arrested in relation to bribery charges in September 2015. Mr Xiao allegedly took bribes in exchange for seeking benefits for others with respect to official selection, sports business etc. In addition to the criminal charges, Tian has also been accused of seriously breaching regulations of China Communist Party with respect to anti-corruption (and has been expelled from the Party) by reason of attending extravagant banquets paid by public funds and playing golf paid for by owners of private enterprises.
SENIOR OFFICIAL OF CHINA SECURITIES REGULATORY COMMISSION BEING INVESTIGATED
Yujun Zhang, an assistant of the Chairman of the China Securities Regulatory Commission (CSRC) was removed from his position on September 22 and is now being investigated by China's anti-corruption watch dog for "severe disciplinary violations". Yujun began his career at the People's Bank of China. He served as the general manager of Shenzhen Stock Exchange for eight years and the general manager of the Shanghai Stock Exchange for four years before he re-joined the CSRC as an assistant of the Chairman of the CSRC.
FORMER RWS DIRECTOR CHARGED WITH BRIBERY
Soh Yew Meng, the former director of Resorts Worlds Sentosa (RWS), has been charged with four counts of receiving bribes from three contractors and three of attempting to receive bribes from two others. Court documents state that Soh granted construction projects of RWS to the contractors in return for bribes amounting to a total of around SGD 317,000 (around US$ 222,000). Soh faces up to 5 years of imprisonment and a SGD 100,000 (around US$ 70,000) fine if he is found guilty. Tan Siow Hui, a freelance quantity surveyor, is charged together with Soh for allegedly aiding and abetting the bribery offences.
RANGERS REPORTS REVEALS CORRUPTION BY FORMER PETROLEUM MINISTER
An official report released by the Sindh Rangers, one of Pakistan's paramilitary internal security forces, indicates that Dr Asim Hussain, the State's former petroleum minister, committed acts of corruption over a period of 4 to 5 years worth hundreds of billions of rupees. According to the report, part of the funds was transferred overseas but all accounts have been seized. The report has been sent to the National Accountability Bureau for further investigation and action.
DEPUTY PRIME MINISTER DEFENDS ANTI-CORRUPTION TRACK RECORD
Malaysian Deputy Prime Minister Zahid has recently defended the nation's anti-corruption track record and promised further efforts to fight against corruption. According to Zahid, the conviction rate of the Malaysian Anti-Corruption Commission (MACC) has increased from 58% in 2009 to 78% in 2014, and Malaysia's ranking on the International Corruption Perception Index has been improved to 50th place, making it the second best track record in the Association of Southeast Asian Nations (ASEAN) after Singapore. Zahid also pledged to further strengthen institutional independence and continue reforms to improve integrity and transparency within the public and the private sectors.
US INVESTIGATION TARGETS MALAYSIAN PRIME MINISTER
A US Federal grand jury is examining allegations of corruption against the Malaysian Prime Minister, Najib Razak. The investigation is focused on certain properties in the US, which were purchased by shell companies belonging to Najib's stepson and other real estate connected to a close family friend. Investigators are also looking into a corruption allegation relating to a transfer of funds from Malaysia's sovereign wealth fund, 1 Malaysia Development Berhad (1MDB), into one of Najib's personal bank accounts.
EAST TIMOR SIGNED MEMORANDUM OF UNDERSTANDING WITH MALAYSIA FOR ANTI-CORRUPTION COOPERATION
Anti-corruption committees in East Timor and Malaysia have signed a memorandum of understanding to promote cooperation in the countries' fight against corruption. The memorandum of understanding calls for cooperation in areas such as personnel training, exchange of experts and human resource development between the two countries.
INDIAN SUPREME COURT SAYS NO MERCY TO CORRUPTION
On 7 September, the Supreme Court of India has called for "zero tolerance" approach in handling corruption cases. In light of the growth of corruption cases in the country, the Supreme Court asked the courts not to give any mercy when rendering punishment to offenders.
GOVERNMENT OFFICIALS AND BRIBE GIVERS ARRESTED IN CRACKDOWN ON CORRUPTION IN THE MINES DEPARTMENT
Former senior officials of the mines department of Rajasthan have reportedly been found by India's anti-corruption bureau to have allegedly accepted bribes from a mine baron paid in connection with resuming operations of some mines in Chittorgarh. The corruption scam involved a middleman who allegedly colluded with top officials of mines department to suspend the operations of mines and then demand bribes from the mine owners in order to resume operations. Ashok Singhvi, an IAS officer, the Principal Mining Secretary of Rajasthan and other senior officials of the Rajasthan state mines involved, the middleman, the Chittorgarh-based mine owner and two of his employees involved have been arrested.
ENFORCEMENT DIRECTORATE OFFICERS BEING INVESTIGATED
The Indian Central Bureau of Investigation (CBI) is investigating a case where officers of Enforcement Directorate (ED), India's law enforcement agency responsible for enforcing economic laws and fighting economic crime, allegedly accepted huge bribes from the accused in a money laundering case that they were investigating. The CBI registered the case based on a complaint filed by the ED which had conducted an internal investigation against these officers.
FORMER SECRETARY GENERAL OF THE MINISTRY OF ENERGY AND MINERAL RESOURCES SENTENCED TO SIX YEARS IN PRISON FOR CORRUPTION
Former Secretary General of the Ministry of Energy and Mineral Resources (ESDM) Waryono Karno has been sentenced to six years in prison and charged a fine of Rp 300 million (US$20,750). Waryono was found guilty of corruption while carrying out ministerial activities, including in relation to a dissemination program, a healthy cycling program and the ministry's building maintenance. He was also found to have accepted US$284,862 in bribes from a private company and to have bribed a lawmaker with US$140,000 to approve budget for the ministry.
KPK TAKE ACTIONS TO ERADICATE NATURAL RESOURCES CORRUPTION
The Corruption Eradication Commission (KPK) has recommended revoking business licenses in forest zones that are suspected to have been granted as a result of corruption. KPK has also made efforts to support the investigation and prevent corrupt practices. It is suggested that KPK should have a larger supervisory role over the regional administrations and that leaders within the KPK should be selected from those with strong commitment and capability to prevent further corruption in the natural resource sector. The aim is to make the KPK less hesitant in bringing private corporations suspected of corrupt practices to justice.
INDONESIAN GOVERNMENT'S DRAFT ANTI-CRIMINALISATION REGULATION GIVES RISE TO CONTROVERSIAL CONCERNS ON ANTI-CORRUPTION
The government of Indonesia is preparing a draft regulation under which law enforcement agencies will be prevented from directly investigating irregularities in government policies until it is categorized as a criminal violation by a specific internal institution (to be established). Concerns arise that this regulation would obstruct the investigation of irregularities in government policies and protect corrupt officials from prosecution. However, some officials have defended the draft regulation on the basis that it will help ensure that public officials will not be wrongly prosecuted by law enforcement institutions when making policies to support development across regions in Indonesia.
For further information, please contact:
Kyle Wombolt, Partner, Herbert Smith Freehills