Confession of a big-time liquidator
Some people are apparently exempted from complying with the Companies Act
From Lost for Words via email
An important question about fairness in the enforcement of the law was inadvertently raised last week at the Annual Insolvency Conference organised by the Malaysian Institute of Accountants, Insolvency Practitioners Association of Malaysia and Certified Public Accountants Malaysia.
During one of the panel discussions, Lim San Peen of PriceWaterhouse Coopers virtually confessed that he was not qualified to carry on with his work as a liquidator.
He categorically stated in front of the large audience that he had not done any statutory audit assignment for more than 20 years, that is, from the time he started becoming involved in insolvency matters.
This statement raises various important governance issues, including the manner in which licences are issued.
The Companies Act 1965 clearly states in Section 8 (2) that a person must be “of good character and competent to perform the duties of an auditor under the act”. It implies that the person must have relevant and suitable experience to qualify for an audit licence, which will be renewed on the proviso that he continues to practise as an auditor, thereby retaining his level of experience. The presumption is that his licence will not be renewed if there is a discontinuance in the relevant experience.
The audit licence is a prerequisite qualification for a liquidator’s license under Section 8 (3) of the Companies Act. To acquire the latter, the relevant experience is also required.
Lim is well known in the insolvency circuit, having been appointed as liquidator in many high profile cases.
His statement at the conference raises the following questions:
1. How did he obtain his audit licence when he has clearly stated that he no longer does any audit assignments?
2. Were the renewal forms properly prepared with truthful statements or merely completed to fulfil the requirements?
3. Are there special privileges and exceptions extended to audit partners of the Big 5 as the same would apply to many of them who are involved only in insolvencies assignments?
4. Has the Malaysian Institute of Accountants considered this matter seriously whilst strongly objecting to the granting of liquidators’ licences to non-accountants, such as lawyers?
5. Why has the Accountant General’s Office granted a licence to a person who does not carry out audit assignments?
The relevant authorities must look into these matters and apply the law consistently. There cannot be one rule for the masses and another for the privileged few.
It is hoped that justice prevails so that we will again have faith in our system of governance and we are all seen as players on a level field.
