Enforcement Highlights
Convictions
Between May and August 2010, the SC secured convictions against two persons. In the Danafutures case, the accused is the first individual to be convicted in Malaysia for operating an illegal online investment scam.

  • May 2010 – Muhammad Khalid Ismail was convicted of CBT and securities offences for misappropriating client’s funds. Muhammad Khalid was sentenced to a jail term of one year for each of the securties offences and a two year jail term for the CBT charge. (see full article on page 3 – titled Oasis Asset Management- former director jailed).
  • July 2010 – Phazaluddin Abu was convicted of operating an online investment scam without a fund manager’s licence under section 15A(1) of the SIA and sentenced to four years imprisonment. In addition, Phazaluddin was also convicted of three offences under section 4(1) of the AMLATFA for taking part in money laundering activities involving a sum of RM1.3 million. He was sentenced to a term of two years imprisonment in respect of each money-laundering charge (to run concurrently). (see full article on page 4 – titled Investment scam – operator jailed four years).

Charges
The SC charged four individuals for committing securities fraud against two public-listed companies.

  • June 2010 – PP v Alice Poh Gaik Lye and Goh Bak Ming. Alice Poh, the former business co-ordinator of Liqua Health Corporation Bhd (Liqua), was charged under section 87A(a) of the SIA for allegedly committing a scheme to defraud Liqua. The SC’s investigations revealed that Liqua paid RM12 million to an entity called Wynsum Sdn Bhd which she controlled. Out of this sum, a total of RM9.75 million was used by Alice Poh to finance the purchase of 45 million Liqua shares. Besides Alice Poh,
    Goh Bak Ming, a former director of Liqua was charged under section 87A(a) read together with section 122C(c) SIA for abetting her.
  • June 2010 – PP v Alan Rajendram and Eswaramoorthy Pillay. The SC charged Alan, a former director of LFE Corporation Bhd (LFE) for committing securities fraud under section 87A(b) SIA. Alan has been charged for defrauding LFE by using RM9 million of LFE’s monies to finance his purchase of LFE shares. At the same time, Alan was also charged with eight other charges under the SIA, CMSA and the Penal Code for cheating and committing CBT. Pillay, Alan’s former business partner was charged under section 87A(b) read together with section 122C(c) of the SIA for allegedly abetting Alan in the offence, as well as for four other offences under the Penal Code for cheating and CBT.

Ongoing Trials
The SC closed the Prosecution’s case in three trials pending before the Sessions Court. Trials commenced in four cases; three involving offences of false reporting and one involving securities fraud and unlicensed trading.

  • May 2010 – PP v Yip Yee Foo and Chung Wai Meng. Yip and Chung were charged in 2004 under section 87A(a) of the SIA for allegedly defrauding Cold Storage (Malaysia) Bhd (CSM) of RM185 million which they used to finance the purchase of CSM shares. They were also charged for CBT under section 409 of the Penal Code in the alternative. The Sessions Court fixed 1 to 3 September 2010, 6 and 7 September 2010, and 14 and 15 October 2010 for trial.
  • May 2010 – PP v Ravandran and Kenneth Tan Kam Sang. Trial commenced against Ravandran and Kenneth Tan, who were both charged in 2004 under section 32B(1) of the Securities Commission Act 1993 (SCA) for their alleged false reports to the SC concerning the utilisation of Kiara Emas Asia Industries Bhd’s rights issue proceeds. The trial had taken place from June through to August and further trial dates have been fixed for 19 to 21 October, 1 to 3 November and, 8 and 9 December 2010.
  • May 2010 – PP v Gordon Toh Chun Toh and Abul Hassan Mohamed Rashid. The SC continued with the trial against both directors of Multi-Code Electronics Industries (M) Bhd (Multi-Code). They were charged in 2009 for allegedly using RM17.55 million of Multi-Code’s funds to purchase the company’s shares. The Prosecution closed its case in August. The hearing of submissions by all parties has been fixed for 17 September 2010.
  • May 2010 – PP v Jamaluddin Hassan, Hakim Sukiman and Gan Chin Sam. The accused persons, the former directors of Satang Holdings Bhd (Satang) were charged under section 122B(b)(bb) of the SIA and section 369(b)(B) of the CMSA. The SC alleged that they falsely reported the financial performance of Satang to Bursa Malaysia by inflating Satang’s revenue figures. The Sessions Court held that the prosecution had not proven a prima facie case at the close of its case.
  • May 2010 – PP v Anuar Abdul Aziz . Anuar was charged under section 15B(b) of the SIA for acting as a fund manager’s representative of Oasis Asset Management Sdn Bhd without a licence. He was acquitted at the end of the Prosecution’s case by the Sessions Court. The SC has appealed against the decision and is awaiting a hearing date.
  • July 2010 – PP v Mohd Adam Che Harun. In 2007, Mohd Adam, the director of Megan Media Holdings Bhd (MMHB) was charged under section 122B(a)(bb) of the SIA read together with
    section 122(1) SIA for allegedly submitting a false statement to Bursa Malaysia on the inflated revenue in MMHB’s quarterly financial statements for the financial periods ended July 2006,
    31 October 2006 and 31 January 2007 respectively. The Prosecution closed its case in July. The court heard submissions of both parties on 23 August 2010 and the SC is currently awaiting the decision of the court.
  • July 2010 – PP v Tan Siok Wan and three others. On 16 August 2010 trial commenced in this case against four directors of GP Ocean Food Berhad (GP Ocean), namely Tan Siok Wan, Lee Sin Teck, Lim Kim Ming and Lim Kim Hai, who were charged with submitting misleading reports which contained inflated revenue figures to the SC. These submissions were made in connection with GP Ocean’s proposal for listing on the Main Board of Bursa Malaysia. In July 2010, alternative charges were preferred against three of the four directors for causing the submission to the SC of misleading information in relation to GP Ocean’s proposal for listing. The SC also withdrew the charge against GP Ocean with respect to the offence under section 32B of the SCA.
  • July 2010 – PP v Gan Boon Aun and Khiudin Mohd. Trial commenced against Gan, the chief executive officer of Transmile Group Bhd (Transmile), and Khiudin, Transmile’s director. The SC alleged that both Gan and Khiudin abetted Transmile in falsely reporting its revenue figures in its quarterly report, an offence under section 86(b) of the SIA read together with section 122C(c) of the SIA. Gan and Khiudin were also charged under section 122B of the SIA in the alternative.
  • May 2010 – PP v Gordon Toh Chun Toh and Abul Hassan Mohamed Rashid. The SC continued with the trial against both directors of Multi-Code Electronics Industries (M) Bhd (Multi-Code). They were charged in 2009 for allegedly using RM17.55 million of Multi-Code’s funds to purchase the company’s shares. The Prosecution closed its case in August. The hearing of submissions by all parties has been fixed for 17 September 2010.
  • May 2010 – PP v Jamaluddin Hassan, Hakim Sukiman and Gan Chin Sam. The accused persons, the former directors of Satang Holdings Bhd (Satang) were charged under section 122B(b)(bb) of the SIA and section 369(b)(B) of the CMSA. The SC alleged that they falsely reported the financial performance of Satang to Bursa Malaysia by inflating Satang’s revenue figures. The Sessions Court held that the prosecution had not proven a prima facie case at the close of its case.
  • May 2010 – PP v Anuar Abdul Aziz . Anuar was charged under section 15B(b) of the SIA for acting as a fund manager’s representative of Oasis Asset Management Sdn Bhd without a licence. He was acquitted at the end of the Prosecution’s case by the Sessions Court. The SC has appealed against the decision and is awaiting a hearing date.
  • July 2010 – PP v Mohd Adam Che Harun. In 2007, Mohd Adam, the director of Megan Media Holdings Bhd (MMHB) was charged under section 122B(a)(bb) of the SIA read together with
    section 122(1) SIA for allegedly submitting a false statement to Bursa Malaysia on the inflated revenue in MMHB’s quarterly financial statements for the financial periods ended July 2006,
    31 October 2006 and 31 January 2007 respectively. The Prosecution closed its case in July. The court heard submissions of both parties on 23 August 2010 and the SC is currently awaiting the decision of the court.
  • July 2010 – PP v Tan Siok Wan and three others. On 16 August 2010 trial commenced in this case against four directors of GP Ocean Food Berhad (GP Ocean), namely Tan Siok Wan, Lee Sin Teck, Lim Kim Ming and Lim Kim Hai, who were charged with submitting misleading reports which contained inflated revenue figures to the SC. These submissions were made in connection with GP Ocean’s proposal for listing on the Main Board of Bursa Malaysia. In July 2010, alternative charges were preferred against three of the four directors for causing the submission to the SC of misleading information in relation to GP Ocean’s proposal for listing. The SC also withdrew the charge against GP Ocean with respect to the offence under section 32B of the SCA.
  • July 2010 – PP v Gan Boon Aun and Khiudin Mohd. Trial commenced against Gan, the chief executive officer of Transmile Group Bhd (Transmile), and Khiudin, Transmile’s director. The SC alleged that both Gan and Khiudin abetted Transmile in falsely reporting its revenue figures in its quarterly report, an offence under section 86(b) of the SIA read together with section 122C(c) of the SIA. Gan and Khiudin were also charged under section 122B of the SIA in the alternative.

Appeals
The SC was successful in two appeals; one at the High Court and another at the Court of Appeal.
In the PTV case, the High Court dismissed the accused persons’ appeals against their convictions and affirmed the Sessions Court’s conviction. In the Yip Yee Foo case, the Court of Appeal decided in favour of the SC and quashed the High Court’s decision which ordered the SC to supply the defence with witnesses’ statements and materials not tendered during the prosecution’s case.

High Court

  • May 2010 – PP v Ariffin Abd Majid and Mohd Raffique Ibrahim Sahib. The respondents, Ariffin and Raffique, were alleged to have committed acts which were calculated to create a misleading appearance with respect to the price of Actacorp Holdings Bhd warrants. At the end of the defence case, the Kuala Lumpur Sessions Court acquitted both respondents and the prosecution appealed against the acquittals. The appeal was heard at the High Court and the matter is now pending decision.
  • June 2010 and July 2010 – PP v Siti Mariam Berahim and Barjoyai Bardai. In 2002, Siti Mariam was charged in the Sessions Court under section 15B of the SIA, for acting as a fund manager’s representative of Perdana Technology Ventures Sdn Bhd (PTV), without a licence. At the same time, Barjoyai Bardai, the Managing Director of PTV was charged under section 18(2) of the SIA read together with section 122(1) of the SIA for allowing Siti Mariam and another to act as fund manager’s representatives. Siti Mariam and Barjoyai Bardai were convicted and sentenced to a fine of
    RM50,000 (in default, six months imprisonment) and RM 100,000 (in default eight, months imprisonment) respectively by the Sessions Court. Siti Mariam and Barjoyai Bardai appealed against their convictions, while the prosecution filed a cross appeal against the sentence. The appeals were heard together in June and July 2010. On 13 August 2010, the High Court dismissed the appeals against convictions and fixed 7 September 2010 for hearing of the cross appeal.
  • August 2010 – PP v Low Thiam Hock. On 18 September 1999, Low Thiam Hock was charged for allegedly manipulating the price of Repco Holdings Bhd (Repco) shares on 3 December 1997. The alleged manipulation had caused Repco’s share prices to rise from RM103.00 to finally close at RM113.00. On 14 November 2006 the Sessions Court acquitted and discharged Low. The SC appealed against the decision of the Sessions Court and the appeal was heard on 19 August 2010. The High Court fixed 13 October 2010 for clarification, is any and decision.

Court of Appeal

  • May 2010 – PP v Yip Yee Foo. On 10 May 2010, the Court of Appeal decided in favour of the SC that witnesses’ statements and materials not tendered during the Prosecution’s case need not be supplied to the defence prior to trial under section 51A of the Criminal Procedure Code.
  • May 2010 – PP v Wira Tjakrawinata. Wira, the promoter of the Omega Holdings Bhd’s (Omega) restructuring proposal, was charged under section 55(1)(a) of the SCA for failing to inform the SC before Omega’s proposal was fully implemented, that the concession agreement was false. He was also charged under section 55(1)(b) of the SCA for issuing Energro Bhd’s (Energro) prospectus without information on the concession agreement, and for inflating the revenue and numbers of cars sold in Energro’s prospectus. On 22 August 2005, Wira pleaded guilty to the charge under section 55(1)(a) of the SCA and was sentenced to one year imprisonment and RM500,000 fine (in default, one year imprisonment) by the Sessions Court. He appealed to the High Court and the High Court reduced the imprisonment sentence from one year to one day and increased the fine to RM2 million (in default, two years imprisonment). The SC appealed against the decision but Wira failed to appear before the Court of Appeal. A warrant of arrest was issued against him but it could not be executed because the authorities could not locate him. Eventually, the Court of Appeal struck out the SC’s appeal against his sentence.
  • July 2010 – PP v Wan Muhammad Hasni. In 1999, Wan Muhammad Hasni, the then Executive Chairman of Abrar Global International Sdn Bhd (AGI) was charged for engaging in an act that operated as a fraud on clients of Abrar Global Asset Management Sdn Bhd (AGAM). The alleged fraud was caused by the misutilisation of clients’ funds totaling RM5.0 million that was meant for investment purposes. Wan Muhammad Hasni was also charged in the alternative for CBT. On 16 April 2003, the Court found him guilty of the offence under section 87A(b) of the SIA 1983. Upon conviction, Wan Muhammad Hasni was sentenced to a fine of RM2.5 million, in default 12 months imprisonment. The SC appealed against the sentence while Wan Muhammad Hasni appealed against his conviction. At the High Court, the conviction was reversed and Wan Muhammad Hasni was acquitted and discharged, following which the SC appealed to the Court of Appeal. The matter was heard before the Court of Appeal in July 2010 and is now pending the decision of the Court of Appeal.
  • July 2010 – Lua Yik Hor v PP. In November 2000, the Sessions Court convicted Lua Yik Hor of 30 charges of short selling North Borneo Timbers Bhd shares in 1995. He was sentenced to two years imprisonment for each charge. Lua Yik Hor appealed to the High Court. In February 2009, the High Court dismissed Lua Yik Hor’s appeal and maintained the imprisonment sentence. Following the High Court’s decision, Lua Yik Hor filed a further appeal to the Court of Appeal. Hearing of this appeal has been fixed for 18 October 2010.

Civil Enforcement
In its civil enforcement actions, the SC was successful in obtaining orders against several parties for breaches of the CMSA, including an injunction restraining the defendent from dealing with proceeds of sale of shares.

  • June 2010 – On 16 June 2010, the SC obtained an injunction against Dato’ Ishak Ismail, restraining him from dealing with RM10.2 million, being proceeds from his disposal of 58.7 million shares of Kenmark Industrial Co. (M) Bhd (Kenmark). These monies will be quarantined pending the outcome of a civil suit the SC has filed against Dato’ Ishak, alleging that he committed the offence of insider trading and market manipulation when he purchased Kenmark shares on 9 June 2010.
  • July 2010 – The SC filed a winding up petition against SJ Asset Management Sdn Bhd (SJAM). The High Court fixed 14 October 2010 for the hearing of the winding up petition. Pending the hearing of the petition the courts appointed provisional liquidators to SJAM in order to protect the interests of all clients and stakeholders of SJAM. (see full article on page 2 – titled SJ Asset Management- SC revokes licence, appoints provisional liquidators).
  • July 2010 – On 12 July 2010, the SC obtained an order under section 360 of the CMSA restraining Rantau Simfoni Sdn Bhd and its director, Zamani Hamdan from trading and investing in futures contracts. Neither the company nor Zamani held any valid licence to trade in futures contracts. The High Court also ordered the defendants to transfer RM198,040 to the SC for the purpose of compensating the investors from whom monies were raised. The order was made following the
    SC’s earlier ex-parte application to the High Court based on findings that the defendants had been carrying on a business of trading in futures contracts without a licence.