Last year was a successful year for our enforcement efforts. Our enforcement measures resulted in swift action against the perpetrators of offences. We also have increasingly resorted to civil action to obtain restitution for investors.
Is that partly because the other actions, such as criminal prosecution or action under the securities offences, have not got the kind of results that you expected?
We have got a range of enforcement tools available to us. We have been increasingly adopting a more strategic approach towards enforcement. In the past, we have tended to rely mainly on criminal prosecution but that takes time. The courts have a backlog of cases and we have to take our turn. So, we needed to look at more effective and efficient enforcement measures although we still resort to criminal prosecution where it is warranted. But increasingly we apply administrative action, which offers quick and effective resolution, and we take civil action in appropriate cases. But we assess each case and still prosecute the major offences.
The evidence is that a lot of crime has been committed but eventually no one gets charged or if charged, not convicted with a stiff penalty. And that seems to encourage more such crime. Your comments, please.
There is a perception that because the SC is the regulator of the capital market, every offence in the capital market, be it by public—listed companies or the directors or the management or even the auditors, falls within the jurisdiction of the SC. Where it does fall within our jurisdiction, our approach is very clear. We will take action, investigate and, if the facts and the evidence warrant it, enforcement action will be taken. And you have seen our track record on this. But sometimes offences in the capital market do not fall within the jurisdiction of the SC. The SC has jurisdiction only where there is a breach of securities laws. Many offences committed in the capital market may not be breaches of securities laws. Some may be criminal breach of trust, which is a penal code offence. Or it could be a breach of directors’ duty to act honestly in the best interest of the company, which is a Companies Act offence. Where in the course of our investigation we uncover these offences, we hand over the information to the relevant agencies as we don’t have the powers to investigate and prosecute. Where, however, the facts reveal multiple offences, then we will be able to mount a joint prosecution.