'Presumption of guilt in certain legislations constitutional'

Presumption of guilt imposed on some individuals under certain legislations, namely Section 122(1) of the Securities Industry Act (SIA), is constitutional, the Federal Court ruled last week.

In a landmark judgment in the case of Public Prosecutor v Gan Boon Aun (Transmile chief executive officer), Justice Jeffrey Tan Kok Wha stated that the presumption and "reverse onus clause" are not prohibited by Article 5 of the Federal Constitution which deals with liberty of a person.

“As such, it was futile to contend that Section 122(1) was unconstitutional because of the presumption and reverse onus clause.

“Section 122(1) would be unconstitutional only if it lacked overall fairness. But no attempt was made by either party to show how that section had or had not gone beyond the permissible limits, and or had or had not unjustifiably infringed the presumption of innocence. Since it was not shown to be otherwise, the presumption in favour of constitutionality could not have been rebutted,” the lordship said.

A reverse onus clause is where an enactment provides that a particular fact is presumed or deemed to exist “unless the contrary is proved”.

Led by Chief Justice Arifin Zakaria, the five-member bench also included Justice Ahmad Maarop, Justice Hasan Lah and Justice Abu Samah Nordin.

Justice Tan said the courts still have the freedom to decide on the adjudication of guilt or innocence.

“If it were true that Section 122(1) adjudicated on guilt, then Gan would not be tried at the trial court,” he said.

Justice Tan wrote this in his 77-page decision which the highest court in the land unanimously answered the question posed in the negative. The decision was made last Wednesday but the written judgment was only made available recently.

Gan, along with another Transmile director Khiudin Mohd, was acquitted on a principal charge of providing a misleading particular in the Transmile Group Berhad’s quarterly report on unaudited consolidated results for the financial year ended Dec 31, 2006.

However, their defence were called for the alternative charge of intent to deceive and furnishing a misleading statement to Bursa Malaysia.

This led to Gan's application for reference to the Federal Court. Following the decision, Justice Arifin ordered the case to be remitted back to the Sessions Court in Kuala Lumpur.

Punish violators with criminal, civil liabilities

Justice Tan reminded that the purpose of SIA was to make provisions with respect to stock exchanges and persons dealing in securities, and for certain offences relating to trading in securities, and for purposes connected to it.

It is evident, he said, that the SIA aim was to regulate the industry, to promote public confidence in the integrity of the stock market, and to punish violators with criminal and civil liabilities.

“A corporate could not be locked up. If individual directors and, or officers were not indicted, the punishment of fine and imprisonment could not be imposed. Was it reasonable that individual directors and, or officers be held accountable for the crimes and, or negative behavior of the corporate?

“After all, a corporate has a separate legal personality from its directors and officers. But a corporate is a legal fiction. In reality, all activities of a corporate are managed by its directors and or officers. Crimes and offences of a corporate could not come about without the acts and or defaults of its directors and or officers,” he said.

Justice Tan added that the presumption was not only fair but also absolutely necessary to protect the stock market.

“There should be no issue about that. The real concern should be whether the presumption and reverse onus clause in Section 122(1) made any unreasonable inroad on the presumption of innocence.

"The presumption of innocence requires the prosecution to prove the guilt of an accused beyond all reasonable doubt,” he said, adding that Section 122(1) provided that the offence against the act or regulation must be proved to have been committed by the corporate. This is before it could be deemed that the offence was committed by its directors and or its officers."

Justice Tan admitted that Section 122(1) provided that directors and or officers of the corporate shall be deemed to have committed the corporate offence.

“But there was no let-up in the burden or standard of proof. It remained that the prosecution had to prove the offence beyond all reasonable doubt before the deeming provision could be triggered. There was no displacement of the presumption of innocence as contended.

“As said, the deeming provision was fair and necessary. There was no merit in the argument that Section 122(1) deemed guilty,” he said.

The judge said Section 122(1) gives the opportunity to Gan to rebut the presumption that he committed the offence committed by the corporate.

He added that, in fact, the guilt or innocence has yet to be decided, pending Gan's defence.

Besides the SIA, Justice Tan listed other legislations where there are exceptions to the general rule, such as the Malaysian Anti-Corruption Commission Act 2009, Customs Act 1967, Police Act 1967, Arms Act 1960 and Dangerous Drugs Act 1952.- Mkini