KUALA LUMPUR: The Malay Chamber of Commerce Malaysia (DPMM) has urged the Companies Commission of Malaysia (SSM) to reconsider the high compound fines imposed on companies found to be in breach of provisions under the Companies Act 2016.
DPMM president Norsyahrin Hamidon said the latest enforcement approach by SSM appears inconsistent with earlier decisions aimed at reducing compliance costs, particularly the exemption from audit requirements granted to micro, small, and medium enterprises (MSMEs) with annual revenue of less than RM1 million starting in 2025.
"DPMM has received numerous complaints and grievances from members and business owners regarding the enforcement of compound fines of up to RM40,000 for breaches of Sections 245, 248, 258 and 340 of the Companies Act 2016," he said in a statement.
He noted that the move places significant financial pressure on MSMEs, which are already facing multiple challenges, including rising operational costs and economic uncertainty.
At the end of 2024, SSM announced audit exemptions for small companies that meet specific criteria, such as having an annual revenue of below RM3 million or fewer than 30 employees.
"Eligible companies are still required to submit unaudited financial statements, while MSMEs with revenue below RM1 million will be fully exempted from audit requirements from next year," he said.
Norsyahrin explained that the audit exemption was intended to reduce compliance costs, ease business operations, and improve efficiency while maintaining strong standards of corporate governance and transparency.
"The imposition of high compound fines for certain administrative offences runs counter to the spirit of compliance cost reduction introduced earlier," he said.
He said Section 245 of the Companies Act 2016 relates to failure to comply with financial statement and audit requirements, including the inability to prepare or submit documents to SSM.
Section 248, he added, concerns the failure to lodge annual returns within the stipulated timeframe, while Section 258 involves offences related to company registration and corporate information.
"Section 340, meanwhile, relates to non-compliance with directives issued by SSM, including instructions to submit required documents or information," he said.
Norsyahrin highlighted that MSMEs contribute approximately 38.3 per cent to Malaysia's gross domestic product (GDP) and provide nearly 66 per cent of employment nationwide.
He warned that excessive compound fines could force small and medium-sized companies out of business, potentially leading to higher unemployment.
"This situation not only threatens business sustainability but may also have broader implications for the stability of the national economy," he said.
"SSM should reconsider a more prudent enforcement approach and the level of compound fines imposed, particularly on MSMEs.
"Sound judgment in addressing this issue is crucial to ensuring the continued operation of MSMEs and safeguarding the country's economic well-being," he added.
Source: https://www.nst.com.my/news/nation/2025/12/1337308/reconsider-high-fines-malay-chamber-commerce-tells-companies-commission