Govt mulls replacing Trustee Act (Act258) to curb abuse
PUTRAJAYA: The Trustee (Incorporation) Act 1952 [Act 258] will likely be replaced with a new act, to curb abuse of trust funds among non-profit organisation (NPO).
Minister in the Prime Minister’s Department Datuk Seri Azalina Othman Said said the Legal Affairs Division (BHEUU) has been tasked to implement initiatives to improve the existing regulatory framework through Act 258 Amendment Studies carried out by Special Committee appointed under the Prime Minister’s Department.
“The study is also looking at the possible replacement of Act 258 which will include additional proposals including monitoring and better administration of the incorporation of NPO trustees in the country,” she said, at the launch of the National Non-Profit Organisation (NPO) 2017 today.
The working processes will also be studied and detailed out again to support the establishment of the new act later, Azalina said.
She added that the complete report by the Special Committee will be presented to the Cabinet for its consideration and approval before being discussed in the next parliament session.
Act 258, which allows the setting up of foundations or organisations to help the less fortunate, needs to be improved through amendments for best governance in the current challenging developments and people-centric government approach.
“The NPO should be strengthened because their management faced certain challenges and are exposed to the opportunity to misappropriate the trust fund for personal gains,” she said.
Azalina said Act 258, which was enacted in 1952, only underwent an editorial amendment in 1981, which meant no substantive amendment was made over the past 36 years.
She said a successful NPO should practice good management, focusing on excellent financial management, record-keeping and effective establishment of internal rules.
“The implementation of best governance practices is an essential infrastructure for every foundation to continue to be relevant and sustainable in implementing the objectives of its establishment.” she added.