BANDAR SERI BEGAWAN

BRUNEI should make its corporate governance framework legally-binding to ensure investor confidence in the country, said an audit and fraud specialist.

Sanjeev Gathani, a long-time consultant to the Brunei government and local financial institutions, said all corporations need checks and balances to prevent corruption and mismanagement.

“Companies need to be regulated and we can’t always rely on self-regulation. At the moment the code is just a guideline and compliance is only voluntary,” he told _The Brunei Times _in a recent interview.

Brunei introduced the Code of Corporate Governance in December 2014, which stipulates each company establish an effective board, an accountable management, and rules which promote transparency and good governance.

The code is aimed at promoting transparency and the investor confidence needed to attract financing for business expansion. Currently the code is not legally binding but is intended as a reference guide.

Gathani, a 15-year veteran in the field, said codifying the framework into legislation will benefit the economy in the long-run, as increased transparency will prevent corruption.

“Companies often don’t want to reveal internal scandals because it can negatively affect their reputation, especially for global corporations,” he said, in reference to the Brunei Shell Petroleum (BSP) corruption scandal in which the head of Musfada Enterprise was jailed for bribing BSP employees to secure $3.2 million worth of contracts.

“When corruption is eradicated the whole economy will open up,” Gathani stressed.

He added that the Code of Corporate Governance encourages companies in Brunei to adopt best international practices.

Corporate governance, which generally refers to the structures and processes by which companies are directed and controlled, has long been regarded as critical to creating a climate that is pro-business and pro-investment.

The Brunei Times