SC acts tough on errant PN4 directors; offenders will be dealt with

Intensive monitoring and surveillance of PN4 companies by the Securities Commission (SC) have revealed a variety of breaches and mismanagement by the directors and senior officers of these companies.

Key SC enforcement official, Deputy Chief Executive Datin Zarinah Anwar, said the perpetrators will be severely dealt with, if not already.

She warned that the SC will not let up on its enforcement activities – action will be taken against the wrongdoers even if the PN4 company is eventually de-listed.

“De-listing will not absolve the perpetrators of fraud or mismanagement. Neither will they be allowed to escape punishment just because white knights have come to the rescue of these companies,” she said.

Datin Zarinah said over the past two years, the SC has examined the books of 31 PN4 companies.

“It is only a matter of time before examination of the rest is completed,” said Datin Zarinah.

She said offences uncovered from these investigations include insider trading and market manipulation as well as corporate governance transgressions such as purchasing assets at inflated prices or selling assets at deflated values, submission of false/misleading information, schemes to defraud and misutilisation of proceeds of capital raising exercises.

The investigations into PN4 companies have so far resulted in 12 prosecutions involving 18 individuals. Of these, four individuals have been convicted while trial is ongoing or yet to commence in respect of the rest.

High profile corporate personalities prosecuted include Dato’ Tony Tiah Thee Kian, Dato’ Soh Chee Wen, Low Thiam Hock and Dato’ Ishak Ismail.

Over the last one month alone, the SC has prosecuted the directors and senior officers of three PN4 companies-Tat Sang, Gensoil and Actacorp.

The SC has also directed companies like CSM Corporation Berhad to restate their financial statements which were found to be misleading and legal action has been instituted by the present management against the former directors and auditors of the company for breach of fiduciary duty.

Apart from the PN4-related investigations and prosecutions the SC is actively investigating another 104 cases and have prosecuted 31 cases involving 48 individuals.

Datin Zarinah said some of the cases investigated by the SC reveal evidence of fraud and criminal breach of trust. These have been referred to the Police while those that constitute breaches of the Companies Act 1965 have been referred to the Companies Commission of Malaysia.

Datin Zarinah said that the authorities are committed to working together to ensure that the offenders are appropriately dealt with.

“Investor protection is one of our key priorities. We need to ensure that high standards of corporate governance prevail as the health and credibility of the market is paramount,” she stressed.

Apart from prosecution, the SC has also imposed 20 administrative actions and issued three compounds against PN4 companies. The KLSE has meted out 102 actions against PN4 companies through fines, reprimands and caution letters.

Highlights of key SC enforcement actions involving PN4 companies and their directors, 1999-2002

Company (alphabetical)

Summary of offence /action taken



Actacorp Holdings Berhad

Puniyamurthi (Assistant General Manager), Mohd Raffique Ibrahim (Group Senior Manager) and Ariffin Abdul Majid (Group Senior General Manager) were charged for manipulating the price of Actacorp warrants.

Date charged: 28 Nov 2002


Awaiting trial.

CSM Corporation Berhad

CSM was required on 25 June 2002 to restate its 1999 financial statements and make appropriate announcement of the restatement.

Accounts restated. The current directors have also taken legal action against the auditors and the previous directors.

General Soil Engineering Holdings Berhad

Tan Soon Geok (Managing Director) was charged for abetting a remisier in manipulating the share price of Gensoil. Tan was also charged for furnishing a false statement to the SC in respect of his dealings in Gensoil shares. Esmail Naziadin, a remisier of MIDF Sisma Securities Sdn Bhd, was also charged for manipulating the share price of Gensoil.
Date charged: 11 Nov 2002

S84 & S85 SIA

Awaiting trial.

Idris Hydraulic (M) Berhad

Dato’ Ishak Ismail – a Director of Idris Hydraulic (M) Bhd – was charged for abetting the company in using RM50 million of the company’s funds raised from a corporate exercise without the prior approval from the SC, thereby breaching approval conditions set by the SC.

Date charged: 28 June 2002

In a separate case, Dato’ Ishak was charged on 24 July 1999 and pleaded guilty on 23 August 2001 to a charge of providing false and misleading information relating to a proposal that was submitted to the SC. He was fined RM400,000 by the court.

S32(6) SCAS32B SCA

Awaiting trial.

Omega Holdings Berhad

Dato’ Soh Chee Wen was charged by the SC for his involvement in a scheme to defraud Omega.
Date charged: 14 May 2002

Datuk Tony Tiah was charged for providing false statement to KLSE in respect of dealings in the shares of Omega Holdings Berhad.
Date pleaded guilty: 10 May 2002



Trial ongoing

Convicted and fined RM3 million.

Plantation & Development (M) Berhad

3 Directors – Chua Peng Len, Gwi Chin Fatt & Yong Thiam Yoon – were charged by SC for misutilising proceeds raised from public issue and submitting false information to SC.
Date charged: 22 Feb 2001

S32(6) SCA

Chua convicted and fined RM250,000 on 17 Sept 2001. Trials for Gwi and Yong are ongoing.

Repco Holdings Berhad

Low Thiam Hock (Chairman) was charged for manipulating Repco shares
Date charged: 18 Sept 1999


Trial ongoing

Tat Sang Holdings Berhad

Lim Chai Hock (Managing Director) was charged with submitting false information to the SC in respect of Tat Sang’s listing proposal and for knowingly authorising the furnishing of false information to KLSE.
Date charged: 12 Dec 2002

S32(B) SCAS122(B) SIA

Awaiting trial.

12 December 2002