SC wins insider trading suit

by RAHIMI YUNUS / pic by MUHD AMIN NAHARUL

THE Securities Commission Malaysia (SC) has won a civil suit against Datuk Sreesanthan Eliathamby for insider trading involving the privatisation of Worldwide Holdings Bhd.

The capital market regulator said the High Court has found the SC had successfully proven its claim in the civil suit against Sreesanthan, 60, a corporate lawyer for insider trading.

In a statement from the SC yesterday, Judge Azizul Azmi Adnan found Sreesanthan had breached section 89E(2)(a) of the Securities Industry Act 1983 when he acquired a total of 600,000 shares of Worldwide between June 7, 2006, and July 11, 2006, while in possession of material non-public information.

In its decision, the High Court found Sreesanthan was in possession of material non-public information relating to the proposed privatisation of Worldwide undertaken by Perbadanan Kemajuan Negeri Selangor by way of a member’s scheme of arrangement under section 176 of the Companies Act 1965.

The proposed privatisation of Worldwide was subsequently announced to Bursa Malaysia on Aug 23, 2006, SC said in a statement yesterday. Sreesanthan was a senior partner in a law firm and acted as a legal advisor for the proposed privatisation of Worldwide.

In allowing the SC’s claim, Sreesanthan was ordered to pay to the SC a sum of RM1.99 million being an amount equal to three times the profits gained as a result of the insider trading.

Additionally, Sreesanthan was also ordered to pay the SC a civil penalty of RM1 million and barred from being a director of any public-listed company for a period of 10 years starting Nov 18, 2020. The SC was also awarded costs of RM100,000.