Kuala Lumpur, 11 January 2011
MEMS Technology case: High Court allows the SC’s appeal & imposes 6-month jail sentence
The High Court today allowed the Securities Commission Malaysia’s (SC) appeal against the Sessions Court’s sentence on Ooi Boon Leong and Tan Yeow Teck, former directors of MEMS Technology Bhd (MEMS). The High Court upheld the original fine of RM300,000 and enhanced the sentence with a six months imprisonment term each.
Ooi and Tan had pleaded guilty before the Sessions Court in February 2010 and were fined RM300,000 each.
Both men had been charged in April 2009 under section 122B(b)(bb) of the Securities Industry Act 1983 (SIA) for authorising the furnishing of misleading information to Bursa with regard to MEMS’ reported revenue of RM73.4 million which was contained in its unaudited Condensed Consolidated Income Statements for the twelve-month period ended 31 July 2007. The revenue was misleading as it included 41% of fictitious sales amounting to RM30.17 million.
In its submission, the SC had argued that taking into account the severity of the offence which involved a very large figure in the financial records, a fine alone was not a deterrent enough sentence. The SC submitted that, as directors of a public-listed company, both men had a fiduciary duty not only to the company but also to the investing public.
In allowing the appeal, the High Court judge stated that the capital market is the heart of the nation’s economy and that its integrity is important to obtain the confidence of investors both locally and overseas.
The SC will continue to seek deterrent sentences for breaches of securities laws in cases that undermine public and investor confidence in the integrity of the Malaysian capital market.
SECURITIES COMMISSION MALAYSIA