SC secures conviction of former director of P&D for misutilising RM26.5 mil of its public issue proceeds

The Securities Commission (SC) has secured a conviction against Gwi Chin Fatt for abetting Plantation & Development Bhd (P&D), which was listed on the Main Board of the Kuala Lumpur Stock Exchange on 31 July 1996, in the misutilisation of public issue proceeds amounting to RM26,493,335.57 between 1 August 1996 and 15 November 1996.

At the material time, Gwi was the Executive Director of P&D. He was jointly charged with Yong Tiam Yoon (then Chief Executive Officer) and Chua Peng Len (then Executive Director) for abetting P&D in contravening SC’s approval condition in the utilisation of its public issue proceeds raised pursuant to its flotation exercise. As a result of their abetment, they had committed an offence under subsection 32(6) of the Securities Commission Act 1993 (SCA).

Gwi and Yong were also jointly charged in the alternative for criminal breach of trust involving RM5,000,000 of the said public issue proceeds.

Gwi pleaded guilty to the principal charge under s32(6) SCA 1993 on 25 July 2005. Prosecution urged the court to impose a deterrent sentence in the public interest, as the funds were from public issue proceeds, as investors’ confidence must be maintained and market integrity upheld. Gwi was acquitted and discharged of the alternative charge of criminal breach of trust.

The Sessions Court sentenced Gwi today to a fine of RM500,000 (in default, 15 months imprisonment). Gwi paid the fine in full.

Yong is still claiming trial, and the Court has fixed 8-10 August 2005 for trial to continue.

Chua had earlier pleaded guilty on 17 September 2001 and was sentenced to a fine of RM250,000 that he paid.

27 July 2005