No.

Nature of Misconduct

Parties Involved

Brief Description of Misconduct

Action Taken

Date of Action

1. Breach of section 65(1)(d) of the CMSA for being an undischarged bankrupt within Malaysia. Ravindran Nair a/l Vasudevan Nair (“Ravindran”) as holder of a Capital Markets and Services Representative’s Licence (“CMSRL”) carrying out the regulated activity of financial planning. Ravindran was adjudged a bankrupt on 19 January 2016. As a result, the SC finds that Ravindran is no longer fit and proper to continue to be licenced as a CMSRL. Revocation of his CMSRL for the regulated activity of financial planning under section 72(2)(b)(i) read together with section 65(1)(d) of the CMSA. 18 November 2016
2. Breach of Section 354(1)(a) read together with Section 58(1) of the Capital Markets and Services Act 2007 (“CMSA”) Kahar Mohd Tahir (“Kahar”) Carrying out the regulated activity of fund management without holding a licence when he accepted monies from third parties and traded in equities and futures on behalf of the third parties
  1. Reprimand;
  2. Directive to restitute the investors as identified by the SC, who had deposited monies into a named investment bank (“Investment Bank”) whose monies were subsequently designated into his securities and derivatives accounts with the Investment Bank (“identified investors”). The restitution is to be made from his following assets held in the Investment Bank:

a) All cash available (including interest) designated to his equity and derivatives trading account; and

b) All shares in his CDS account.

In this regard, Kahar is to instruct the Investment Bank to liquidate all shares in his CDS account within five (5) business days from 30 August 2016. In the event that he fails to instruct the Investment Bank to liquidate the shares within the stipulated time and restitute the identified investors, the Investment Bank will proceed to liquidate such shares on his behalf and restitute the identified investors without further reference to him; and

3. Penalty of RM75,000

On 20 September 2016, Kahar appealed to the SC against the imposition of penalty and sought for an extension of time to pay the penalty.

On 21 November 2016, the SC decided to affirm the imposition of penalty amounting to RM75,000 but allowed Kahar to make payment of the penalty by 30 November 2016.

30 August 2016
3. Breach of Section 354(1)(a) read together with Sections 370(1)(c) and 58(1) of the CMSA Afkariah Md Norani Abetting Kahar in carrying out the regulated activity of fund management for which he was not licensed by introducing the investment arrangement to third parties
  1. Reprimand; and
  2. Penalty of RM75,000
30 August 2016
4. Breach of Section 354(1)(a) read together with Sections 370(1)(c) and 58(1) of the CMSA Gurdeep Kaur a/p Nathi Singh Abetting Kahar in carrying out the regulated activity of fund management for which he was not licensed by introducing the investment arrangement to third parties
  1. Reprimand; and
  2. Penalty of RM75,000 On 13 September 2016, Gurdeep appealed to the SC against the sanctions imposed. On 21 November 2016, the SC decided to affirm the sanctions but allowed Gurdeep to make the payment of the penalty in six (6) monthly instalments of RM12,500 each.
30 August 2016
5. Breach of section 354(1)(a) read together with section 317A(1) of the Capital Markets and Services Act 2007 (“CMSA”) Yong Poh Yow (“Yong”) As Chief Executive Officer and Executive Director (“ED”) of Dufu Technology Corp Berhad (“DTC”) at the material time, Yong had caused wrongful loss to DTC when he made remittances amounting to USD1,010,041 to Ehrenstein Charbonneau Calderin (“ECC”), US Orthopedics Inc. (“USO”) and Mediscope Manufacturing Inc. (“Mediscope”) without approval or board resolution authorising the said remittances. NOTE : The unauthorised remittances have since been refunded to DTC. 1. Reprimand; and
2. Penalty of RM200,000
24 September 2016
6. Breach of section 354(1)(a) read together with sections 370(1)(c) and 317A(1) of the CMSA Lee, Hui Ta @ Li Hui Ta (“Lee”) Abetting Yong in causing wrongful loss to DTC in that:(a) as Chief Financial Officer and ED of DTC at the material time, Lee had together with Yong, approved the payment vouchers and forms for remittances amounting to USD950,041 to ECC, USO and Mediscope; and(b) the remittances amounting to USD950,041 to ECC, USO and Mediscope were made without approval or board resolution authorising the remittances.NOTE : The unauthorised remittances have since been refunded to DTC. 1. Reprimand; and
2. Penalty of RM150,000
24 September 2016
7. Breach of Sections 65(1)(g)(iv) and (l)  of the Capital Markets and Services Act 2007 (“CMSA”) for:

  • having engaged in business practices appearing to the SC to be improper; and
  • the SC has reason to believe that the holder of Capital Markets Services Representative’s Licence (“CMSRL”) will not carry on the regulated activity of dealing in securities efficiently, honestly or fairly.
Ong Kok Aun (“OKA”), as holder of a CMSRL carrying out the regulated activity of dealing in securities. OKA was found to be in breach of Rules 401.1(3), 404.3(1)(a) and (c) and 1302.1(1)(a) and (g) of the Pre-Revamped Rules of Bursa Malaysia Securities for engaging in manipulative activities in relation to the trading of ETI Tech Corporation Berhad shares. As a result, the SC finds that OKA is no longer fit and proper to continue to hold a CMSRL. Revocation of CMSRL for dealing in securities under Section 72(2)(b)(i) of the CMSA. 13 September 2016
8. Breach of Section 356(1) of the Capital Markets and Services Act 2007 read together with Paragraphs 7 and 13.1(c) of the Guidelines on Prevention of Money Laundering and Terrorism Financing for Capital Market Intermediaries (“AML Guidelines”) SJ Securities Sdn Bhd (“SJ”) (a holder of a Capital Markets Services Licence carrying out the regulated activity of dealing in securities)
  • Failure to adopt a Risk Based Approach in identifying and assessing its money laundering and terrorism financing (“ML/TF”) risk; and
  • Failure to adopt and implement an effective internal control system to assess, profile and address ML/TF issues.
  • Reprimand;
  • Penalty of RM270,000; and
  • Directives for:
    • SJ, at its own costs, to appoint an external auditor acceptable to SC, to assess SJ’s existing anti-money laundering and counter-terrorism financing (“AML/CFT”) framework with the requirements of the AML Guidelines. In this regard the external auditor must report to SC:
    • within six (6) months from the date of sanctions, the identified gaps and remedial measures on SJ’s AML/CFT framework; and
    • within twelve (12) months from the date of sanctions, a verification that the remedial measures are completed and the effectiveness thereof.
  • SJ’s Board of Directors and key management personnel including the Head of Compliance to attend two (2) AML/CFT trainings to familiarise themselves with the requirements under the AML Guidelines or similar AML/CFT trainings on preventive measures that is consistent with the standards issued by the Financial Action Task Force.
15 August 2016
  • On 9 September 2016, SJ submitted a review application against SC’s decision. Having considered the grounds of review, the SC had on 11 November 2016 rejected SJ’s application and upheld all sanctions imposed.
9. Breach of Section 356(1) of the Capital Markets and Services Act 2007 read together with Paragraphs 11.2, 11.3, 11.4 & 11.5 of Guidelines on Prevention of Money Laundering and Terrorism Financing for Capital Market Intermediaries AmFunds Management Berhad(a holder of Capital Markets Services Licences carrying out  the regulated activity of dealing in securities restricted to unit trust, fund management and dealing in Private Retirement Scheme)
  • Failure to establish reasonable grounds in deciding not to lodge Suspicious Transaction Report (“STR”) to the Financial Intelligence and Enforcement Department of Bank Negara Malaysia (“FIED”);
  • Failure to sufficiently record documentary evidence to support its decision not to lodge STR to FIED.
Penalty of RM420,000 15 August 2016
10. Breach of section 354(1)(a) read together with section 71 of the Capital Markets and Services Act 2007 (“CMSA”) Ezral Ghazali bin Shahudin (“Ezral”) Ezral had made statements that were false or misleading in a material particular in relation to an application for a Capital Markets Services Licence for Isoquant Sdn. Bhd., by representing to the SC that:(a) Isoquant Capital Management Pte. Ltd. was licensed or registered with the Monetary Authority of Singapore (“MAS”) and thus, he was the Chief Executive Officer of an entity licensed or registered with MAS; and(b) he was licensed or registered with MAS.
  • Reprimand; and
  • Penalty of RM50,000.
14 July 2016
11. Breach of section 356(1)(a) read together with section 61(4) of the CMSA
  • Zainol Aswan bin Mukhtar (“Zainol”), a Capital Markets Services Representative’s Licence (“CMSRL”) holder for the regulated activity of dealing in securities;
  • Lim Hung Chiang (“LHC”), a CMSRL holder for the regulated activities of dealing in securities and dealing in derivatives; and
  • Nan Azazi bin Azman (“Nan Azazi”), a CMSRL holder for the regulated activity of dealing in securities.

 

Zainol, LHC and Nan Azazi had, without written authorisation from their clients, accepted and acted on instructions from a third party in relation to the trading accounts of their clients.As a result, the SC finds Zainol, LHC and Nan Azazi to have failed to comply with a condition of their CMSRL which requires them to remain fit and proper at all times and to carry out their licensed regulated activities efficiently and fairly as provided in Paragraph 7.03 of the Licensing Handbook.
  • Against Zainol and Nan Azazi
    Reprimand
  • Against LHC
    Reprimand and penalty of RM100,000
15 July 2016
  • On 26 July 2016, LHC submitted an application for a review of the penalty amount. Alternatively, he appealed for payment of the RM100,000 to be made in 10 monthly instalments. Having considered the grounds of review, the SC had on 20 October 2016 decided to uphold its decision to maintain the quantum of penalty of RM100,000. The penalty is to be paid in 5 equal monthly instalments.
12. Breach of Section 297(3) of the Capital Markets and Services Act 2007 (“CMSA”) in which a management company shall not make improper use of its position in managing a unit trust scheme to directly gain an advantage for itself. Public Mutual Berhad (a Capital Markets Services License holder carrying out the regulated activity of fund management and dealing in securities restricted to unit trust). PMB had recognised RM6.5 million interest earned from short term placements of unit holders’ monies in the main collection account in its financial statement for the year ended 31 December 2014 and management account for the 3 months ended 31 March 2015. (a) Reprimand

16 May 2016

(b) Directive for PMB to restitute to the affected funds, within six (6) months from 16 May 2016:(i) the RM6.5 million interest earned  for the period from 1 January 2014 to 31 March 2015; and(ii) any other interest income that PMB has recognised in its subsequent financial statements from 1 April 2015 to 16 May 2016.
(c) Directive for PMB:(i) to immediately implement rectification measures on its internal policies and procedures (“P&P”) to ensure that any interest earned from investment of monies placed in the main collection account are credited back to the affected funds; and(ii) to submit to SC within two (2) months from the date the restitution is perfected, a report prepared by PMB’s Group Internal Audit to verify that the restitution exercise is complete and an assessment on the effectiveness of the rectification measures undertaken.
On 15 June 2016, PMB submitted applications against SC’s decision to reprimand and the quantum of the amount to be restituted to the affected funds.
SC on 31 October 2016 allowed the applications by PMB. Hence the revised sanctions imposed against PMB are as follows:

  • Directive for PMB to restitute to the affected funds, within six (6) months from 31 October 2016:
    • The RM3.2 million interest earned for the period from 1 January 2014 to 31 March 2015; and
    • any other interest income that PMB has recognised in its subsequent financial statements from 1 April 2015 to 31 October 2016.
  • Directive for PMB:
    • to immediately implement rectification measures on its internal policies and procedures (“P&P”) to ensure that any interest earned from investment of monies placed in the main collection account are credited back to the affected funds; and
    • to submit to SC within two (2) months from the date the restitution is perfected, a report prepared by PMB’s Group Internal Audit to verify that the restitution exercise is complete and an assessment on the effectiveness of the rectification measures undertaken.
 31 October 2016
13. Breach of Section 65(1)(g)(iv) of the CMSA for engaging in business practices appearing to the SC to be deceitful or otherwise improper improper. Chan Yew Mun (“Chan”), as holder of a Capital Markets Services Representative’s Licence (“CMSRL”) carrying out the regulated activity of dealing in securities. Chan engaged in business practices appearing to the SC to be deceitful or otherwise improper relating to Chan’s following conduct:

  • (a) he obtained a total of 10 cheques amounting to RM2.5 million from 4 of his clients purportedly for fixed deposits to be placed with RHB Investment Bank Berhad;
  • (b) he issued fraudulent “FD Acknowledgement Slips” to these clients;
  • (c) he allocated proceeds from these cheques into the trading account of his wife and proceeds were subsequently used for personal purposes and settlement for trading losses.

As a result, the SC finds that Chan is no longer fit and proper to continue to hold a CMSRL.

Revocation of CMSRL for dealing in securities under Section 72(2)(b)(i) of the CMSA.

26 Apr 2016

14. Breach of Section 65(1)(d) of the CMSA for being an undischarged bankrupt within Malaysia. Syed Fahmi Syed Omar as holder of a Capital Markets Services Representative’s Licence (“CMSRL”) carrying out the regulated activities of dealing in securities and derivative. Syed Fahmi was found to be an adjudged bankrupt by the Malaysian Department of Insolvency on 6 August 2015.As a result, the SC finds that Syed Fahmi is no longer fit and proper to continue to be licenced as a CMSRL. Revocation of his CMSRL for the regulated activities of dealing in securities and derivatives under Section 72(2)(b)(i) read together with Section 65(1)(d) of the CMSA.

29 Feb 2016

15. Breach of:(a) section 354(1)(b)(i) of the CMSA read together with rule 4.07(3) of the ACE Market Listing Requirements (“AMLR”); and(b) section 354(1)(b)(ii) of the CMSA read together with paragraph 3.21 of the  Guidelines on Due Diligence Conduct for Corporate Proposals (“GoDD”) AmInvestment Bank Berhad (“AmInvestment”) . AmInvestment failed to:(a) comply with paragraph 3.15(a) of the GoDD to make due and careful enquiry and ensure it had reasonable grounds to believe that the application to the SC meets the relevant requirements of the SC; and(b) undertake a further and more detailed verification and investigation;when it did not take into account the realisation of multiple risk factors concurrently in the preparation of the profit forecast of XOX Berhad (“XOX”) for the financial year ending 31 December 2011 (“Profit Forecast”) appearing in XOX’s prospectus dated 24 May 2011 in conjunction with the listing and quotation of XOX’s entire enlarged issued and paid-up share capital on the ACE Market of Bursa Malaysia Securities Berhad. (a) Reprimand; and(b) Directive to conduct a comprehensive review and assessment for adequacy of all policies and processes relating to AmInvestment’s role as principal adviser and/or sponsor for corporate proposals (as defined in GoDD). Results of such review and assessment together with recommendations (if any) must be reported to the SC within three (3) months from the date of action.

4 Feb 2016

16. Breach of section 354(1)(b)(ii) of the CMSA read together with:(a) paragraphs 12.21(e), 12.22(a) and 12.23(c) of the Prospectus Guidelines – Equity and Debt (“PG”); and(b) paragraph 3.07 of the GoDD. Ng Kok Heng (“Ng KH”) Ng KH, an Executive Director of XOX as at 24 May 2011 failed to ensure that:(a) the Profit Forecast was compiled with utmost care and objectivity;(b) there was a reasonable basis for the Profit Forecast; and(c) the Profit Forecast was realistic and achievable;The above is in relation to the significant variance between the Profit Forecast and XOX’s unaudited results for the financial year ended 31 December 2011 which was mainly attributable to inadequate consideration of the factors/risks present at the time the Profit Forecast was prepared. Thus, the bases and assumptions used in arriving at the said Profit Forecast were not reasonable. Reprimand

4 Feb 2016

Wong Yip Kee (“Wong YK”) Wong YK, an Executive Director of XOX as at 24 May 2011 failed to ensure that:(a) the Profit Forecast was compiled with utmost care and objectivity;(b) there was a reasonable basis for the Profit Forecast; and(c) the Profit Forecast was realistic and achievable.The above is in relation to the significant variance between the Profit Forecast and XOX’s unaudited results for the financial year ended 31 December 2011 which was mainly attributable to inadequate consideration of the factors/risks present at the time the Profit Forecast was prepared. Thus, the bases and assumptions used in arriving at the said Profit Forecast were not reasonable.
17. Breach of Sections 65(1)(g)(iv) and (l) of the CMSA for:(a) engaging in business practices appearing to the SC to be improper; and(b) the SC has a reason to believe that Tan Kai Kiat will not carry on the regulated activity of dealing in securities efficiently, honestly or fairly. Tan Kai Kiat as holder of a Capital Markets Services Representative’s Licence (“CMSRL”) carrying out the regulated activity of dealing in securities. Tan Kai Kiat was found to be in breach of Rules 401.1(3), 404.3(1)(a) and (c) and 1302.1(1)(a) and (g) of the Pre-Revamped Rules of Bursa Malaysia Securities and Rules 3.14(d), (e), (f) and (g), 5.01(b) and paragraph 1.1(1)(h) of Directive No.5-001 of the Rules of Bursa Securities for engaging in manipulative activities in relation to the trading of the following shares and structured warrants:
1. Oriental Holdings Bhd;
2. Genting Plantations Bhd;
3. PPB Group Bhd;
4. IJM Plantations Bhd;
5. Land & General Bhd;
6. Integrated Rubber Corporation Bhd;
7. Narra Industries Bhd;
8. CIMB Group Holdings Bhd and CIMB-CZ;
9. DRB-Hicom Bhd ( DRBHCOM) and DRBHCOM-C2;
10. Malaysian Bulk Carriers Bhd (MAYBULK) and MAYBULK-CN; and
11. UEM Sunrise Bhd and UEMS-C6. As a result, the SC finds that Tan Kai Kiat is no longer fit and proper to continue to be licenced as a CMSRL.
Revocation of his CMSRL for dealing in securities under Section 72(2)(b)(i) of the CMSA.

28 Jan 2016

18. Breach of Sections 65(1)(g)(iv) and (l) of the CMSA for:(a) engaging in business practices appearing to the SC to be improper; and(b) the SC has a reason to believe that Low Lay Ai will not carry on the regulated activity of dealing in securities efficiently, honestly or fairly. Low Lay Ai as holder of a Capital Markets Services Representative’s Licence (“CMSRL”) carrying out the regulated activity of dealing in securities. Low Lay Ai was found to be in breach of Rules 401.1(3), 404.3(1)(a) and (c) and 1302.1(1)(a) and (g) of the Pre-Revamped Rules of Bursa Malaysia Securities for engaging in manipulative activities in relation to the trading of ETI Tech Corporation Berhad shares.As a result, the SC finds that Low Lay Ai is no longer fit and proper to continue to be licenced as a CMSRL. Revocation of her CMSRL for dealing in securities under Section 72(2)(b)(i) of the CMSA.

28 Jan 2016

CMSA refers to the Capital Markets and Services Act 2007