SC gets court ruling on Axis insider trading

By IZZAT RATNA / pic by TMR file

SECURITIES Commission Malaysia (SC) has obtained a judgement from the High Court yesterday against three defendants for insider trading involving the shares of Axis Inc Bhd.

In a statement yesterday, the SC said the material information referred to in the action is related to unresolved issues in relation to Axis’ financial statements for its financial year ended March 31, 2008 (FY08).

“This resulted in Axis not being able to submit its audited financial statement for the period under review. The announcement relating to the material information was made on July 30, 2008,” the SC said.

As such, all three defendants were ordered to pay the SC a civil penalty of RM1 million each, with costs and interest.

They are also barred from being a director of any public-listed company for a period of five years.

Koh Tee Jin, a former director of Axis, was declared to have breached Section 188 (3)(a) of the Capital Markets and Services Act 2007 (CMSA) when he communicated inside information to his father, Koh Thiam Seong and sister, Koh Hui Sim.

Thiam Seong and Hui Sim were declared to have breached Section 188 (2)(a) of CMSA by disposing a total of 244,000 and 739,800 Axis shares respectively between July 9 and July 30, 2008, while in possession of material non-public information.

Following the judgement in default of appearance, Tee Jin was ordered to pay the SC a total sum of three times the loss avoided by Thiam Seong and Hui Sim amounting to RM3.55 million.

Both Thiam Seong and Hui Sim were ordered to pay the SC RM739,389 and RM2.81 million respectively, which were three times the loss each of them had avoided from the difference in price of Axis shares disposed against the likely price had the material of non-public information been made available.

The SC is a statutory body reporting to the finance minister and was established under the Securities Commission Act 1993. It is the sole regulatory agency for the regulation and development of capital markets.

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