Anti Bribery And Corruption Policy

PART A: OBJECTIVE AND SCOPE                                            

 

A.1.   Objective and Anti-Bribery and Corruption (“ABC”) Commitment

 

The Code of Conduct and Ethics of Karyon Industries Berhad (“the Company”) and its subsidiaries (collectively with the Company, “the Group”) approved by the Board of Directors of the Company set out the core principles in relation to anti-bribery and corruption whereby the Group upholds highest standards of integrity in all business interactions and a zero-tolerance on any and all forms of Bribery and Corruption (including but not limited to, the acts to promise, offer, give, solicit, accept or obtain any Bribery and Corruption and any attempts thereof). All business dealings should be transparently performed and accurately reflected on records with monitoring and enforcement procedures implemented to ensure compliance with anti-corruption laws and best practices. 

The core objective of this Anti-Bribery and Corruption Policy (“ABC Policy” or “Policy”) is to establish adequate procedures as well as policies and controls to ensure the Group’s compliance with the principles of zero-tolerance on any and all forms of Bribery and Corruption as well as applicable Anti-Bribery and Corruption laws and regulations. In addition, it is an overriding principle that the Group's businesses are to be conducted in an honest and ethical manner. This Policy is also to encourage the reporting of any form of Bribery and Corruption in good faith and in confidence without the fear of reprisal. Officers, Employees and Business Associates performing works or services for or acting on behalf of the Group shall comply with this Policy and applicable laws and regulations in jurisdictions within which the Group operates.

If there is conflict among the law of the country in relation to the anti-bribery and corruption, the policy or procedure set out in this Policy and/or local custom or practice, the stricter of the law of the country, the policy or procedure set out in this Policy and/or local custom or practice shall prevail.

A.2.   Scope of ABC Policy

 

This ABC Policy is applicable to all Officers and Employees of the Group.

 

All Business Associates performing works or services for or acting on behalf of the Group (including but not limited to, contractors, sub-contractors, consultants, agents, representatives and others performing work or services for or on behalf of the Group) will have to comply with the principles, policies and procedures as established in this Policy when performing their work or services for and on-behalf of the Group.

 

Associated companies of the Group and joint-venture companies in which the Company or its subsidiary(ies) is a non-controlling co-venturer are encouraged to adopt this Policy.

 

 

 

 

PART B: POLICY AND PROCEDURES

B.1.   Gift

  • The Group has adopted a "No Gift" policy, subject only to certain narrow exceptions.
  • There are certain types of gifts which are never permissible if it involves the below (including but not limited to): 
    • Any gifts of cash or cash equivalent, except for funeral or marriage.
    • Any gift that would be illegal or in breach of local or foreign bribery and corruptions laws.
    • Any gift which is lavish or excessive e.g. valued above the maximum threshold or may adversely affect the reputation of the Group.
    • Any gift which is given in conflict of interest situation.
    • Any gift that comes with a direct/ indirect suggestion, hint, understanding or implication that in return for the gift some expected or desirable outcome is required.

B.1.1.  Receiving Gifts

  • Accepting a gift on behalf of the Group is allowed only in very limited circumstances whereby refusing the gift is likely to seriously offend and may sever the Group’ business relationship with the external parties.
  • Officers and Employees are required to record the gift in the Gift/Entertainment/Corporate Hospitality/Travelling Register Form and subject to approval requirements established and the treatment of the gift decided by the authorised personnel. 

A copy of the completed Gift/Entertainment/Corporate Hospitality/Travelling Register Form shall be maintained for review. 

B.1.2.  Providing Gifts

  • Generally, all Officers and Employees are not allowed to provide gifts to Third Party with exception of approval from authorised personnel, subject to the maximum threshold of RM 1,000.
  • All gift claims shall be subject to the approval by the authorised personnel. Listing of the gift provided by the Group is maintained for review.

B.1.3.  Exceptions to the "No Gift" Policy   

  • There are certain exceptions to the general rule whereby the receiving and provisions of gifts are permitted in the following situations, subject to approval by authorised personnel: –
  1. Exchange of gifts at the Company-to-Company level (e.g.: gifts exchanged between companies as part of an official Company visit / courtesy call and thereafter said gifts is treated as the Group’s property);
  2. Gifts from the Group to external institutions or individuals in relation to the Group’s official functions, events and celebrations (subject to the maximum threshold);
  1. Gifts from the Group to Officers, Employees, Business Associates acting for or on behalf of the Group in relation to an internal or externally recognised corporate function, event and celebration;
  2. Token gifts (subject to the maximum threshold) of nominal value normally bearing the official logo of the Group or the giver that are given out to all participants, delegates, customers, partners and key stakeholders attending official events and for the Group's or the giver’s brand building or promotional activities; and
  3. Gifts to external parties (mainly for monetary gifts or gifts in-kind to charitable organizations or education related organisations or not-for-profit organisations), subject to B.4. Corporate Social Responsibility (“CSR”), Donation and Sponsorship. 

 

B.2.   Entertainment and Corporate Hospitality

  • Certain types of entertainment and corporate hospitality activities which are never permissible if involves the following:
  1. Direct/indirect suggestion, hint, understanding or implication that in return for the entertainment provided some expected or desirable outcome is required.
  2. Any entertainment and corporate hospitality activities that would be illegal or in breach of local or foreign bribery and corruption laws.
  3. Any entertainment and corporate hospitality activities that involve Public Official shall be subject to approval requirements and subject to maximum threshold per headcount per event.
  4. Any other entertainment and corporate hospitality activities (not involving Public Official) that would be perceived as extravagant lavish, and excessive or may adversely affect the reputation of the Group. The limit for entertainment is restricted up to approval threshold per headcount per event. Any amount exceeds this approval threshold shall be subject to approval by authorised personnel before the event and subject to maximum threshold per headcount per event. 
  5. Any entertainment and corporate hospitality activity which involves conflict of interest situation.
  6. Any entertainment and corporate hospitality activity that is sexually oriented or may otherwise tarnish that reputation of the Group.

B.2.1. Providing Entertainment and Corporate Hospitality

  • Only eligible Officers and Employees as approved by authorised personnel are allowed to entertain Third Party through a reasonable act of hospitality and are strictly prohibited from providing or offering to provide entertainment with a view to improperly cause undue influence on any party in exchange for some future benefits/results or result in conflict of interest situation.
  • All entertainment and corporate hospitality claim by all Officers and Employees shall be subject to approval by authorised personnel. Listing of the entertainments provided by the Group is maintained for review.

 

 

PART B: POLICY AND PROCEDURES (Cont’d)

B.2.2. Receiving Entertainment and Corporate Hospitality

 

  • Only eligible Officers and Employees approved by authorised personnel are allowed to receive entertainment and corporate hospitality from Third Party and are strictly prohibited from receiving or attempt to receive entertainment and corporate hospitality with a view to improperly cause undue influence on any party in exchange for some future benefits/results or result in conflict of interest situation.

 

  • The entertainment and corporate hospitality shall be approved via Gift/Entertainment/Corporate Hospitality/Travelling Register Form. If the Employees and Officers are provided by Third Party with entertainment and corporate hospitality with short response time allowed, relevant Officers and Employees shall report such entertainment and corporate hospitality received in Gift/Entertainment/Corporate Hospitality/Travelling Register Form.
  • A copy of the completed Gift/Entertainment/Corporate Hospitality/Travelling Register Form shall be maintained for review.

 

B.3.   Travelling

  • Certain types of travelling which are never permissible if involves the following:
  1. Direct / indirect suggestion, hint, understanding or implication that in return for the travelling provided some expected or desirable outcome is required.
  2. Any provision of travelling to Employees, Officers, customers/suppliers and Public Official that would be illegal or in breach of local or foreign bribery and corruption laws.
  3. Any provision of travelling which involve conflict of interest situation.
  4. Any provision of travelling and associated entertainments that is sexually oriented or may otherwise tarnish that reputation of the Group.

B.3.1. Providing Travelling

  • Only travelling for the sole purpose of the products and services provided by the Group (for example, in relation to certification of the Group’s products) or provision of services by the suppliers (for example, travelling to the Group’s premises arranged by the Group to perform maintenance services on the Group’s machinery) and approved by authorised personnel are allowed.
  • All Officers and Employees are strictly prohibited from providing or offering travelling with a view to improperly cause undue influence on any party in exchange for some future benefits/results or result in conflict of interest situation.
  • Any provision of travelling to Public Official shall be subject to approval requirements.
  • All claims on provision of travelling by all Officers and Employees shall be subject to approval by authorised personnel. Listing of the travelling provided by the Group is maintained for review.

B.3.2. Receiving Travelling

  • Only eligible Officers and Employees approved by authorised personnel are allowed to receive travelling from Third Party, subject to the condition that such travelling is required for the purpose to perform his/her functions for the sole purpose to deliver the goods or services offered by the Group.
  • All Officers and Employees are strictly prohibited from receiving or attempt to receive travelling with a view to improperly cause undue influence on any party in exchange for some future benefits/results or result in conflict of interest situation.
  • All provision of travelling by Third Party are subject to approval requirements via Gift/Entertainment/Corporate Hospitality/Travelling Register Form. If approval is not granted, relevant Officers and Employees shall be prohibited to receive such travelling.
  • A copy of the completed Gift/Entertainment/Corporate Hospitality/Travelling Register Form shall be maintained for review.

 

 

B.4.   Corporate Social Responsibility (“CSR”), Donation and Sponsorship

 

CSR, Donation and Sponsorship is only permissible if it is aligned with the following principles:

  • There is a valid and legit charitable cause and purpose for the CSR programme, donation and sponsorship and the CSR programme, donation or sponsorship is not prohibited by local law and regulations;
  • Appropriate due diligence shall be conducted on the charitable or not-for-profit organisation for charitable donations, contributions and sponsorship;
  • The CSR programme, donation and sponsorship are not made to secure an improper business advantage; 
  • The CSR programme, donation and sponsorship are not used as a conduit or circumvention for bribery and corruption as well as money laundering; and 
  • The transaction is properly recorded as a 'donation' or 'sponsorship' in accounting records with details of organisation the donation or sponsorship is contributed.

All CSR programme, donations or sponsorship made by the Group are subject to approval by authorised personnel. 

Listing of the CSR programme expenses, donations or sponsorship made by the Group is maintained for review.

 

B.5    Facilitation Payment

 

“Facilitation Payment” is defined as illegal or unofficial payment (usually small in amount) made in return for services which the payer is legally entitled to receive without making such payment and normally as payments made to secure or expedite the performance by a person performing a routine or administrative duty or function.

 

All Officers and Employees must not offer, promise, give, request, accept or receive anything which might reasonably be regarded as a facilitation payment, regardless of the amount where non-compliance shall be a violation of this Policy.

 

 

B.6    Money Laundering

 

All Officers, Employees and Business Associates acting for or on behalf of the Group must not involve, directly or indirectly, in any money laundering activities and non-compliance shall be a violation of this Policy.

 

 

PART C: CONTROL ACTIVITIES

 

The financial controls, non-financial controls and due diligence process are implemented in order to manage and prevent bribery and corruption risks identified by the Group.

 

C.1.   Financial Controls

 

The Group shall implement relevant financial controls (documented in the relevant standard operating procedures) that manage bribery and corruption risks.

 

C.2.   Non-Financial Controls

 

The Group shall implement relevant non-financial controls (documented in the relevant standard operating procedures) that manage bribery and corruption risks with respect to such areas as procurement, operational, sales, commercial, human resources, legal and regulatory activities.

 

C.3.   Due Diligence

 

Due diligence (documented in the relevant standard operating procedures) will be conducted on Officers, Employees and Third Party (including any Business Associates that act on behalf of the Group) before entering into any official relationship with the Group.  

 

The financial controls, non-financial controls and due diligence process implemented are subject to improvement based on the results of the subsequent risk assessment, incident management and responses to non-compliances.

 

 

 

 

PART D: CONFLICT OF INTEREST

All Officers, Employees and Business Associates acting for or on behalf of the Group shall comply with the Code of Conduct and Ethics of the Group and must avoid situations in which could conflict with their professional obligations or duties and must not use their position and authorities, the Group’s resources and assets, or information available to them for personal gain or for the benefit of the Related Party[1] to such person or to the Group’s disadvantage. All Officers and Employees and Business Associates acting for or on behalf of the Group must not enter into any transaction with conflict of interest situation, unless such Officers and Employees or Business Associates disclose their interest in the contemplated transaction or contract and such interested Officers and Employees are abstained from participating in the discussion and decision in relation to the interested transaction or contract and compliance with relevant laws and regulations.

All Officers, Employees (except foreign workers and production operators) and Business Associates acting for or on behalf of the Group shall declare their interests and relationship before or when business relationship is established and at the frequency as required.

 

 

PART E: DEALING WITH BUSINESS ASSOCIATES

 

It is mandatory that appropriate Business Associate due diligence to be carried out before entering into any arrangements with them. Subsequent to the appointment, the Group is to continuously monitor compliance with this Policy by the Business Associates.

 

Business Associates are subject to the following Business Associate Anti-Bribery and Corruption Risk Management process:

  1. Business Associate Risk Assessment;
  2. Review and Registration;
  3. Proportionate Due Diligence;
  4. Contract or trading terms with Business Associate shall include the compliance with the Group’s ABC Policy;
  5. Communications and training on the importance of countering bribery and corruption; and
  6. Continuous Monitoring on ABC compliance of Business Associates.

 

 

PART F: DEALING WITH OFFICERS AND EMPLOYEES

All Officers and Employees are subject to the following Officers and Employees Anti-Bribery and Corruption Risk Management process:

 

  1. Job Function Risk Assessment;
  2. Recruitment and screening process;
  3. Proportionate Due Diligence;
  4. Contract with all Officers and Employees shall include the compliance with the Group’s ABC Policy;
  5. Communications and training to communicate clearly to all Officers and Employees the importance of countering bribery and corruption, ABC Commitment, ABC Policy, the ways it expects all Officers and Employees to act and consequences of non-compliance; and
  6. Continuous Monitoring on ABC compliance of Officers and Employees.

 

PART G: MERGER, ACQUISITION AND INVESTMENT

ABC Policy on Merger and Acquisition and Investment needs to be integrated from the start of the Merger and Acquisition and Investment process to run alongside legal, financial and other due diligence processes.

G.1.     PRE-ACQUISITION

 

  • In the pre-acquisition process of the Merger and Acquisition, the Group will make an initial assessment of the acquiree’s bribery and corruption risks in order to assess what proportionate level of bribery and corruption due diligence to be performed and properly scoped and prioritised. All Merger and Acquisition shall be subjected to anti-bribery and corruption due diligence process, unless the non-performance is approved by the Board of Directors of the Company. 

 

If bribery and corruption risks are identified, the Group will obtain the response from the acquiree on its mitigation and resolutions. If the risks cannot be mitigated and it is concluded that they are unacceptable, the proposed Merger and Acquisition shall be dropped. 

 

  • The anti-bribery and corruption due diligence report prepared is submitted to the appropriate level of Management and the Board of Directors of the Company to consider and for decision.

 

  • Contract for the Merger and Acquisition shall include the compliance with the Group’s ABC Policy.

 

G.2.     POST-ACQUISITION

 

  • Post-Acquisition Due Diligence shall be performed if access to information has been restricted or denied in the pre-acquisition phase. Remedial action will be formulated by authorised personnel if bribery and corruption risks are identified and it will be necessary to report suspected bribery and corruption promptly to the authorities.

 

  • When the integration process is completed, the acquiree should be monitored as part of the Group’s ABC Policy.

 

 

PART H: ADVICE AND SPEAK-UP CHANNEL

The Group had established Advice and Speak-Up Channel for all stakeholders.

H.1.     Advice Channel 

Advice Channel provides information and answer queries about the anti-bribery and corruption programme and dedicated compliance function is responsible for the Advice Channel internally and externally via liaison with the relevant personnel in the Group.

 

 

 

 

PART H: ADVICE AND SPEAK-UP CHANNEL (Cont’d)

H.2.     Speak-Up Channels 

The stakeholder should report the incidents directly via the Whistleblowing Policy whereby the confidentiality of the whistleblower will be preserved and such informer will be protected from reprisal, including any form of harassment and victimisation, as a consequence of his genuine disclosure which shall also comply with relevant laws and regulations. Please refer to Whistleblowing Policy as published in the Group’s corporate website.

 

 

PART I: INCIDENT MANAGEMENT

The Group identifies potential and actual incidents of bribery and corruption via monitoring mechanism, audits, advice and speak-up channels and reputable media reporting or by the authorities as a consequence of other investigations.

All alleged bribery and corruption incidents should be investigated by the Group with the identity of the informer being protected and such informer will be protected from reprisal as a consequence of his genuine disclosure which is in compliance with relevant laws and regulations in relation to protection of whistleblower.

The Group shall report to the relevant regulator, as soon as practical, if the bribery and corruption incident is against any applicable laws and regulations.

 

 

PART J: REVIEW, EVALUATION AND CONTINUOUS IMPROVEMENT

 

The Group shall perform and review the followings on predetermined interval:

  1. Compliance of ABC Policy;
  2. Non-compliance incidents;
  3. Incidents reported and its resolutions and responses;
  4. Summary of results of monitoring for continuous improvement; and
  5. Progress of mitigation plan and improvements to be made as per the previous reporting.

The Group to review the relevance and adequacy of the ABC Policy and shall formulate mitigation plans and improvement programme based on the results of the review on predetermined interval.

 

 

PART K: DOCUMENTED INFORMATION

 

All records and documents on due diligence processes, business correspondences and other documents must be kept by the Group for at least three (7) years.

 

 

PART L: DEALING WITH NON-COMPLIANCE

Any Officers, Employees and Business Associates found to be non-compliance with the policies, procedures and requirements of this Policy or non-compliance with relevant laws and regulations in relation to anti-bribery and corruption in any jurisdiction, shall be subject to the actions (including but not limited to, warning/show cause letter, suspension, penalty/damages, demotion, dismissal or termination of contracts) as determined appropriate, judging from the seriousness of the offence or non-compliance.

PART L: DEALING WITH NON-COMPLIANCE (Cont’d)

In addition, the Group may:

  1. Terminate and withdraw from the transaction or contract concerned if the non-compliance or offences not satisfactorily resolved;
  2. Repay or reclaim any improper benefit obtained or paid;
  3. Take legal action in the event that the Group’s interests have been harmed by the results of non-compliance by individuals and/or organisations; and
  4. If bribery and corruption has occurred, take action to avoid or deal with any possible consequent legal offences and be co-operative with the investigation carried out by relevant authorities on the non-compliance or offence.

 

PART M: RISK ASSESSMENT

 

The risk assessment process shall be performed by the Group to determine adequacy of existing and proposed control activities to mitigate existing and potential bribery and corruption risks.

 

The risk assessment shall be performed when deemed necessary in the following circumstances:

  1. Major change in internal or external business environment;
  2. Merger and acquisition as well as joint venture; or
  3. Major change in business arrangements and business activities.

In any event, the performance of risk assessment by the Group shall be performed at least yearly, in line with Paragraph 15.29(1)(c) of Bursa Malaysia Securities Berhad’s Main Market Listing Requirements and comprehensive risk assessment on bribery shall be performed every three (3) years per Guidelines On Adequate Procedures Pursuant to Subsection (5) of Section 17A (5) under the Malaysian Anti-Corruption Commission Act 2009.

 

 

REVIEW AND APPROVAL OF THIS POLICY

 

This Policy was adopted by the Board on 29 May 2020.

 

This Policy will be reviewed by the Board as and when required and updated in accordance with the needs of the Group, and in any event, at least once every 3 years, in line with Paragraph 15.29(1)(b) of Bursa Malaysia Securities Berhad’s Main Market Listing Requirements.

[1] As defined under Paragraph 1.01 of the Main Market Listing Requirements