INTRODUCTION

When you invest by buying stocks in a company, you expect the company to deliver profits and give you a good return on your investment. However, time and again, investors have seen the value of their investments shrink through poor corporate governance practices by the controlling shareholders or corporate managers. Well-publicised corporate governance abuses have seen insiders strip companies of their assets by various means, or directors who repeatedly fail to perform their fiduciary duties to protect the company’s assets and interests and commit the company to loss-making projects.

This happens because many minority shareholders are generally ignorant of their rights and are also unaware that they are being oppressed. When they do become aware, they often adopt a passive and inexperienced approach to the lack of good corporate governance practices, and do not take any action. When they do decide to take action, they are not familiar with their rights, their options and the appropriate channels to air their grievances. They may also not realise that there is a legal time frame for taking action until it is too late.

We have also seen, time and again, instances where retail investors have been talked into buying investment products such as exchange-traded derivatives or unit trust funds that are not suited to their risk appetite or investment objective. Such investors may end up losing more money than they can tolerate when the value of their investments fluctuate in the market. More often than not they will blame bad luck for their misfortunes, as they are unaware that they have rights against such unprofessional behaviour by market intermediaries.

You Have Rights

As an investor, you have:

• rights as a shareholder of a company; and
• rights as a customer to high quality products and services from your stockbroker/remiser or futures broker/registered representative or unit trust management company/unit trust agent.

In Malaysia, the rights of investors are protected under several existing laws, i.e. under the Companies Act 1965 (CA), Securities Commission Act 1993 (SCA), Securities Industry Act 1983(SIA), Futures Industry Act 1993 (FIA), Securities Industry (Central Depository Act) 1991 (SICDA) and the rules of the Kuala Lumpur Stock Exchange (KLSE), Malaysian Exchange of Securities Dealing & Automated Quotation (MESDAQ) and Malaysia Derivatives Exchange (MDEX).

This section is intended to provide some guidance as to how you, as an investor, can exercise your:

• right to seek information
• right to voice opinions
• right to lodge complaints.