Kuala Lumpur, 10 November 2009

Individual fined in Kiara Emas fund misappropriation case

The Securities Commission Malaysia (SC) has secured a conviction against Dato’ Tan Hooi Chong for abetting Kiara Emas Asia Industries Berhad (KEAIB) in the misappropriation of the rights issue proceeds amounting to RM16,937,739.20 between 16 December 1996 and 31 December 1996.

Tan pleaded guilty to the said offence under section 32(6) Securities Commission Act 1993 (SCA) read together with Section 40 and Section 109 of the Penal Code. Tan had also admitted to misutilising the rights issue proceeds for his personal benefit.

In sentencing Tan to a fine of RM600,000, the Sessions Court had taken into account public interest. It acknowledges that a deterrent sentence is necessary to maintain investors’ confidence, even though Tan is a first time offender.

Upon conviction, section 39A SCA provides for penalty up to RM1 million or imprisonment of 5 years or both.

At the material time of the offence, Tan oversaw the business operations and financial affairs of KEAIB and its subsidiaries. He was to be jointly tried with KEAIB’s former accountant Tan Kam Sang and its external auditor Ravandaran Thangeveloo who had furnished false information to the SC pertaining to the rights issue proceeds after it had been misutilised by Tan.

The Sessions Court fixed 11 January 2010 for mention to commence prosecution against the other two accused persons.