Kuala Lumpur, 14 April 2009
SC appeals against the acquittal of Metrowangsa director
The Securities Commission (SC) has filed an appeal against the decision of the Kuala Lumpur Sessions Court on 1 April 2009 to acquit and discharge Mohamad bin Abdul Wahab, 57, on a second charge for knowingly authorizing misleading statements to be submitted to the SC.
The former Executive Director of Metrowangsa Asset Management Sdn Bhd was charged under Section 122B(b)(cc) of the Securities Industry Act 1983 (SIA) for submitting misleading information to the SC on assets managed by the company. The penalty upon conviction for this offence is a fine not exceeding RM3 million or imprisonment for a term not exceeding 10 years, or both.
Metrowangsa failed to disclose investments made by two of its clients, Lembaga Tabung Haji (LTH) and Mimos Berhad, in its semi-annual reports to the SC for periods ending December 2000 and June 2001.
These reports are necessary to ensure that licensed fund managers accurately account for the total funds they manage. Failure to provide accurate information will impede the SC’s ability to effectively monitor the activities of fund managers who are entrusted with their client’s monies.
Mohamad was additionally charged alongside Metrowangsa’s former Chief Executive Officer Dr Ghazali Atan under section 47C of the SIA in relation to mismanagement of a trust account. Both men had been found guilty by the Kuala Lumpur Sessions Court for making unlawful withdrawals of RM50 million belonging to LTH, and fined RM200,000 each.
The SC’s investigation uncovered that monies paid by LTH to Metrowangsa for investments were withdrawn from LTH’s trust account, without LTH’s consent or knowledge. Metrowangsa then used LTH’s monies to pay Mimos, who had earlier requested a withdrawal of their investments.
The SC had revoked Metrowangsa’s fund management and futures fund management licence, as well as the licences of Dr Ghazali and Mohamad in 2002.