KUALA LUMPUR - Malaysia's securities watchdog said Tuesday (Jan 18) it was unable to determine if the country's anti-graft chief has broken the law in a closely-watched case involving the purchase of stocks several years ago.

The Securities Commission (SC) said in a statement that it "has concluded its enquiry and based on the evidence gathered, the SC is not able to conclusively establish that a breach under section 25(4) of the Securities Industry (Central Depositories) Act 1991 has occurred."

The section states that a trading account must be in the name of the beneficial owner or an authorised nominee.

The controversial case involves Tan Sri Azam Baki, chief commissioner of the Malaysian Anti-Corruption Commission (MACC), who purportedly bought a substantial number of stocks in two listed companies using his trading account, for his brother in 2015. The case came to light several weeks ago.

The issue has raised a huge outcry, with the opposition and even sections within Malaysia's ruling coalition asking Mr Azam to step aside while a full probe is carried out.

Mr Azam has refused to step down, and has insisted he did not break any laws. He further said the stocks have since been transferred to the account of his brother Nasir Baki.

He has not explained publicly why his brother had to use his account to buy those securities, which is potentially a breach of Malaysia's securities law.

Another question raised was the volume of stocks bought, with reports saying Mr Azam held 1,930,000 shares of Gets Global in 2015 and 2,156,000 warrants of Excel Force MSC in 2016.

The shares and warrants were valued at close to RM1 million (S$320,000 now), and, in holding them, Mr Azam could have breached rules prohibiting public officials from owning more than RM100,000 of any company.

In a statement, Mr Azam said: “I have been informed by the SC that the inquiry into the matter has been concluded. As such, it has closed the inquiry file accordingly.

“With that, I will continue my responsibilities as the chief commissioner of the MACC to fight corruption in the country without fear or favour.”

The statement by the securities regulator SC did not say why it failed to establish a breach of the securities law in Mr Azam's case.

The SC has prosecuted others for using another person's name to buy stocks in the past. It charged one Mr Daniel Yong Chen-I in 2018 for allowing his wife to acquire shares through his account, an offence "punishable with a fine not exceeding RM1 million and an imprisonment term not exceeding five years". The charge was withdrawn after Mr Yong paid a fine of RM500,000.

In another case, in 2011, one Ms Surinder Kaur Jessy paid RM25,000 for allowing someone else to trade with her account.

Opposition leader and former Malaysian finance minister Lim Guan Eng said on Tuesday that the SC needs to explain why it couldn't establish that Mr Azam has breached the relevant section of the securities law "when Azam has openly and publicly admitted that he had allowed his brother to conduct proxy share trading".

The Azam case had raised further uproar after the chairman of MACC's anti-corruption advisory board (ACAB), Tan Sri Abu Zahar Ujang, cleared Mr Azam on Jan 5 of wrongdoing. The advisory board in fact could only advise on MACC matters, and has no powers to prosecute or clear anyone accused of wrongdoing.

Mr Abu Zahar said he was satisfied there was neither pecuniary interest nor conflict of interest as the latter had explained in a Nov 24 meeting "that his brother had used his share trading account to acquire the shares".

But three days later, six other members of ACAB issued a joint statement to distance themselves from their chairman's stance, saying they were not satisfied with the explanations given by Mr Azam.

The MACC chief this week refused to attend a Parliamentary Select Committee (PSC) overseeing Agencies in the Prime Minister's Department which was to be held on Wednesday (Jan 19).

It was reported that he had objected to the PSC probe as he is suing whistleblower Lalitha Kunaratnam over her articles on the share ownership controversy.

As such, he claimed that his testimony would violate Parliamentary Standing Orders that do not allow Parliament to discuss matters pending in court.

He also said that he was already being investigated by the Securities Commission and the MACC Complaints Committee.

"Who is he to override Parliament?" asked opposition lawmaker Khoo Poay Tiong on Tuesday.

A street protest is being planned on Saturday (Jan 22), dubbed 'Catch Azam Baki'.

Mr Azam was promoted to MACC chief immediately after Pakatan Harapan fell in March 2020 and Umno returned to power just 21 months after losing the 2018 polls.

The spotlight on Mr Azam is the latest in a series of controversies surrounding Malaysia's main anti-graft body.

In September last year, US$6 million (S$8.1 million) disappeared from the strong room of the MACC. Three officers were arrested and one of them was charged on Monday.

Police also arrested another three MACC personnel in December to assist investigations into the robbery of a Kuala Lumpur home involving the loss of RM700,000.