Kuala Lumpur, 8 November 2011
Court of Appeal upheld jail sentence on former directors of MEMS Technology
In a landmark decision for securities cases, the Court of Appeal on Friday upheld a six months jail term imposed by the High Court on two former directors of MEMS Technology Berhad (MEMS), for authorizing the furnishing of a misleading statement to Bursa Malaysia in MEMS’s Condensed Consolidated Income Statement for the 12 month period ended 31 July 2007. The two former directors of MEMS, which was delisted in November 2010, were charged in the Sessions Court in Kuala Lumpur in 2009 for the misleading statement which related to the company’s reported revenue of RM73.416 million as it contained over RM30 million of sales that did not take place.
Ooi Boon Leong and Tan Yeow Teck had on 25 February 2010 pleaded guilty at the Sessions Court to committing the offence and were fined RM300,000 each upon which the Public Prosecutor appealed to the High Court on the grounds that the sentence was manifestly inadequate.
In enhancing the sentence, the High Court Judge Justice Dato Hj Ghazali bin Cha, in January 2011 imposed an additional six months jail sentence to the fine of RM300,000 which had been imposed by the Sessions Court. The High Court judge had cited public interest as a reason for the enhanced sentence, pointing out that the offence affected the integrity of the capital market. Ooi and Tan had then appealed to the Court of Appeal against the sentence.
The Court of Appeal, presided by Datuk Sulong bin Matjeraie JCA together with Dato’ Mohd Hishamudin bin Haji Mohd Yunus JCA and Datuk Clement Allan Skinner JCA, on 4 November 2011, agreed with the decision of the High Court judge to impose a six months jail term as the sentence of a fine was manifestly inadequate and did not adequately reflect the seriousness of the offence. In its unanimous decision, the Court of Appeal emphasized that knowingly furnishing misleading information to the stock exchange is a serious offence because potential investors, both foreign and local rely on such information. The Court of Appeal affirmed that a custodial sentence was necessary in order to ensure that investors would not lose confidence in our market and to deter potential wrongdoers.
Ooi and Tan were represented by their counsel Dato V. Sithambaram. They are now currently serving their jail term.
SECURITIES COMMISSION MALAYSIA