Updates on Criminal Prosecution in 2017

No. Nature of Offence Offender(s) Facts of Case Sentence
Criminal Prosecution Initiated – Persons Charged
1. Carrying on a business in a regulated activity, namely dealing in derivatives, without holding a Capital Markets Services Licence (CMSL). Su Eng Koi (‘Su’) Su, who was at the material time, an officer of Jalatama Management Sdn Bhd (JMSB) was charged under section 58(1) read together with Section 367(1) of the Capital Markets and Services Act 2007 for carrying on a business of dealing in derivatives without holding a CMSL, through JMSB between 1 July 2011 and 1 September 2013. Su was charged on 5 July 2017
2. Yap Choong Seong (‘Yap’) Yap, who was at the material time, an officer of Jalatama Management Sdn Bhd (JMSB) was charged under section 58(1) read together with Section 367(1) of the Capital Markets and Services Act 2007 for carrying on a business of dealing in derivatives without holding a CMSL, through JMSB between 1 July 2011 and 1 September 2013. Yap was charged on 5 July 2017
3. Insider trading Yeow Kheng Chew Yeow was charged with one count of insider trading under section 188(2)(a) of the Capital Markets and Services Act 2007 (CMSA). He is alleged to have acquired 1,159,000 units of Kencana Petroleum Berhad (Kencana) shares through the account of Paulene Chee Yuet Fang on 8 July 2011 while in possession of inside information. The SC alleged that the inside information referred to in the charges related to the proposed merger of Kencana and SapuraCrest Petroleum Berhad. Four additional charges were preferred under section 188(2)(a) of the Capital Markets and Services Act 2007 (CMSA). He is alleged to have acquired 4,000,000 units of Kencana shares through the account of Asia Premium Corp on 2 June, 17 June, 7 July and 8 July 2011 while in possession of inside information. The SC alleged that the inside information referred to in the charges related to the proposed merger of Kencana and SapuraCrest Petroleum Berhad. Yeow was charged on 29 July 2016.Additional charges were preferred on 2 May 2017.All charges against Yeow were withdrawn on the instructions of the Attorney General on 20 July 2017.
4. Insider trading Paulene Chee Yuet Fang Chee was charged under section 370(c) read together with section 188(2)(a) of the CMSA with one count of abetting Yeow Kheng Chew in acquiring 1,159,000 units of Kencana Petroleum Berhad (Kencana) shares on 8 July 2011 while he was in possession of inside information relating to the proposed merger of Kencana and SapuraCrest Petroleum Berhad. Four additional charges were preferred under section 370(c) read together with section 188(2)(a) of the CMSA for abetting Yeow Kheng Chew in acquiring 4,000,000 units of Kencana shares on 2 June, 17 June, 7 July and 8 July 2011 while he was in possession of inside information relating to the proposed merger of Kencana and SapuraCrest Petroleum Berhad. Chee was charged on 29 July 2016.Additional charges were preferred on 2 May 2017.All charges against Chee were withdrawn on the instructions of the Attorney General on 20 July 2017.
5. Insider trading Tan Yee Chee Tan was charged under section 370(c) read together with section 188(2)(a) of the CMSA with one count of abetting Yeow Kheng Chew in acquiring 1,159,000 units of Kencana Petroleum Berhad (Kencana) shares on 8 July 2011 while he was in possession of inside information relating to the proposed merger of Kencana and SapuraCrest Petroleum Berhad. Tan was charged on 29 July 2016.The charge against Tan was withdrawn on the instructions of the Attorney General on 20 July 2017.
6. Insider trading Leong Wye Keong Datuk Leong Wye Keong was charged with four counts of insider trading under section 188(2)(a) of the Capital Markets and Services Act 2007 (CMSA). He is alleged to have disposed 2,131,400 units of Maxbiz Corporation Berhad (Maxbiz) shares in the account of Leong Khai Shaun on 30 December 2010 and another 8,100,000 units of Maxbiz shares in his own account between 30 December 2010 and 18 January 2011 while in possession of inside information.
The SC alleged that the inside information referred to in the charges related to the decrease in Maxbiz’s shareholders’ equity which was close to Maxbiz being classified as financially distressed and the classification of Maxbiz as an affected listed issuer under Practice Note 17 (PN17) criteria 2.1(a).
Datuk Leong was charged on 29 May 2017.
7. Insider trading Vincent Leong Jee Wai Dato’ Vincent Leong Jee Wai was charged with two counts of insider trading under section 188(3)(a) of the Capital Markets and Services Act 2007 (CMSA) for having communicated to Datuk Leong Wye Keong between 26 November 2010 and 18 January 2011 inside information in relation to the decrease in Maxbiz Corporation Berhad (Maxbiz)’s shareholders’ equity which was close to Maxbiz being classified as financially distressed and the classification of Maxbiz as an affected listed issuer under Practice Note 17 (PN17) criteria 2.1(a). Dato’ Vincent was charged on 22 May 2017.
8. Insider trading Yeow Kheng Chew Yeow was charged with one count of insider trading under section 188(2)(a) of the Capital Markets and Services Act 2007 (CMSA). He is alleged to have acquired 1,159,000 units of Kencana Petroleum Berhad (Kencana) shares through the account of Paulene Chee Yuet Fang on 8 July 2011 while in possession of inside information. The SC alleged that the inside information referred to in the charges related to the proposed merger of Kencana and SapuraCrest Petroleum Berhad.Four additional charges were preferred under section 188(2)(a) of the Capital Markets and Services Act 2007 (CMSA). He is alleged to have acquired 4,000,000 units of Kencana shares through the account of Asia Premium Corp on 2 June, 17 June, 7 July and 8 July 2011 while in possession of inside information. The SC alleged that the inside information referred to in the charges related to the proposed merger of Kencana and SapuraCrest Petroleum Berhad. Yeow was charged on 29 July 2016.Additional charges were preferred on 2 May 2017.
Criminal Prosecution Initiated – Persons Charged
1. Insider trading

Paulene Chee Yuet Fang

Chee was charged under section 370(c) read together with section 188(2)(a) of the CMSA with one count of abetting Yeow Kheng Chew in acquiring 1,159,000 units of Kencana Petroleum Berhad (Kencana) shares on 8 July 2011 while he was in possession of inside information relating to the proposed merger of Kencana and SapuraCrest Petroleum Berhad.Four additional charges were preferred under section 370(c) read together with section 188(2)(a) of the CMSA of abetting Yeow Kheng Chew in acquiring 4,000,000 units of Kencana shares on 2 June, 17 June, 7 July and 8 July 2011 while he was in possession of inside information relating to the proposed merger of Kencana and SapuraCrest Petroleum Berhad. Chee was charged on 29 July 2016.Additional charges were preferred on 2 May 2017. 

 

Outcome of Criminal Prosecution and Appeals
1. Engaged in an act which operated as a fraud in connection with the purchase of securitiesCriminal breach of trust (Lybrand) Ngu Tieng Ung(Daniel) Wong Jit Kiang 2 charges were preferred against Ngu Tieng Ung, director of Pancaran Ikrab Berhad (PIB) at the material time, for engaging in an act which operated as a fraud on PIB by utilising RM15.5 million of PIB’s funds to finance his purchase PIB shares when the money was not meant to be utilised for that purpose.Ngu was also charged for committing criminal breach of trust in respect of RM21.5 million of PIB’s funds.Ngu was also charged with an alternative charge to the 3 principal charges for committing criminal breach of trust involving RM37 million of PIB’s funds.Wong Jit Kiang was charged as an abettor to Ngu on all the aforesaid charges. Ngu Tieng Ung and Wong Jit Kiang were charged on 5 May 2005.
Wong Jit Kiang failed to attend court since 23 March 2009 and on 24 March 2010, the Sessions Court granted a discharge not amounting to an acquittal against him. A warrant of arrest is still pending against him.In October 2010, Ngu pleaded guilty to the two principal charges under the SIA and was sentenced to one day imprisonment and RM1 million fine for each charge. In August 2011 upon appeal, the High Court, set aside the conviction and sentence, and remitted the matter for a retrial to the Sessions Court.The retrial against Ngu commenced in January 2012. In August 2013, the Sessions Court ordered Ngu to enter his defence on the alternative charge of committing criminal breach of trust RM37 million of PIB’s funds.On 11 September 2015, the Sessions Court convicted Ngu of criminal breach of trust under s409 Penal Code and sentenced him to 6 years imprisonment and RM 1 million fine, in default 2 years imprisonment.On 5 May 2017, the High Court allowed Ngu’s appeal and set aside the Sessions Court’s conviction and sentence. The Prosecution’s cross appeal on sentence was also dismissed.

On 5 May 2017, the Prosecution filed an appeal to the Court of Appeal against Ngu’s acquittal.

 

2. Insider trading Chew Lian Foon Chew was charged under section 370(c) read together with section 188(2)(a) of the CMSA with 7 counts of abetting Fang Siew Yee in acquiring 2,620,000 units of Three-A Resources Berhad (3A) shares between 27 August 2009 and 2 October 2009 while in possession of inside information relating to the proposed collective venture between the businesses of 3A and Wilmar and information relating to the proposed private placement of up to 20% of the issued and paid-up share capital 3A to Wilmar. Chew was charged on 25 October 2016.Chew was discharged not amounting to an acquittal on 21 April 2017.
3. Insider trading Ong Kok Aun Ong was charged under section 370(c) read together with section 188(2)(a) of the CMSA with 1 count of abetting Fang Siew Yee in acquiring 100,000 units of Three-A Resources Berhad (3A) shares on 5 October 2009 while in possession of inside information relating to the proposed  private placement of up to 20% of the issued and paid-up share capital of 3A to Wilmar. Ong was charged on 25 October 2016.Ong was discharged not amounting to an acquittal on 21 April 2017.
Outcome of Criminal Court Cases and Appeals
1. Furnishing false statements to Bursa Malaysia Securities Berhad Koh Tee Jin
Lee Han Boon
Saipuddin Lim bin Abdullah
Koh Tee Jin, Saipuddin Lim and Lee Han Boon were each charged with five counts of furnishing false statements relating to the revenue of Axis Incorporation Berhad (“Axis”) to Bursa Malaysia. The charges which were preferred under section 122B(b)(bb) of the Securities Industry Act 1983 (SIA) and section 369(b)(B) of the Capital Markets and Services Act 2007 (CMSA) were in relation to false statements contained in Axis’ four quarterly reports for the Financial Year 2007 and the quarter ending 31 March 2008 Koh Tee Jin, Lee Han Boon and Saipuddin Lim were charged on 21 March 2013.

On 10 July 2017, Lee Han Boon and Saipuddin Lim each pleaded guilty to one charge of furnishing false statements to Bursa in Axis’ quarterly report for the Financial Year ending 31 March 2008. The other four charges were taken into consideration by the court under section 171A of the Criminal Procedure Code during sentencing.

Lee Han Boon was sentenced to 7 months imprisonment and RM200,000 fine while Saipuddin Lim was sentenced to 12 months imprisonment.

2. Abetting the furnishing of a false statement to Bursa Malaysia Securities Berhad Lee Koon Huat Lee Koon Huat was charged with four counts of abetting Axis Incorporation Berhad (“Axis”) in furnishing false statements relating to the revenue of Axis to Bursa Malaysia. The charges which were preferred under section 122C(c) read together with section 122B(a)(bb) of the Securities Industry Act 1983 (SIA) were in relation to false statements contained in Axis’ four quarterly reports for the financial year 2007.
3. Submission of misleading information to SC in connection with a proposal Dato’ Lim Kim Ming (“Lim KM”) Lim KM was charged with having committed an offence under section 32B(1)(a)(aa) read together with section 138(2) of the SCA when GP Ocean Food Berhad (GP Ocean) submitted  through Alliance Merchant Bank Bhd, misleading information to the SC contained in:

  • Gropoint Fisheries Sdn Bhd’s Directors’ Report and Audited Financial Statements 31 January 2006; and
  • Gropoint Seafood Industries Sdn Bhd’s ‘Directors’ Report and Audited Financial Statements 31 January 2006.

Gropoint Fisheries Sdn Bhd and Gropoint Seafood Industries Sdn Bhd were at the material time subsidiaries of GP Ocean. The information was required to be submitted to the SC in connection with GP Ocean’s proposal for listing on the Main Board of Bursa Malaysia Securities Bhd.

Lim KM was charged in the Sessions Court on 22 May 2007. On 6 January 2011, the Sessions Court acquitted and discharged him.The prosecution then appealed to the High Court, which on 14 February 2017, overturned the acquittal and ordered Lim KM to enter his defence on the charge against him.Trial at the Sessions Court is fixed to resume on 24 October 2017.
4. Submission of misleading information to SC in connection with a proposal Lim Kim Hai (“Lim KH”) Lim KH was charged with having committed an offence under section 32B(1)(a)(aa) read together with section 138(2) of the SCA when GP Ocean submitted through Alliance Merchant Bank Bhd, misleading information to the  SC contained in GP Ocean’s Directors’ Report and Financial Statements 31 January 2006.This information was required to be submitted to the SC in connection with GP Ocean’s proposal for listing on the Main Board of Bursa Malaysia Securities Bhd. Lim KH was charged in the Sessions Court on 22 May 2007.On 6 January 2011, the Sessions Court acquitted and discharged him.The prosecution then appealed to the High Court, which on 14 February 2017, overturned the acquittal and ordered Lim KH to enter his defence on the charge against him.
Trial at the Sessions Court is fixed to resume on 24 October 2017.Lim KH has since filed an appeal against the decision of the High Court to the Court of Appeal.
5. Submission of misleading information to SC in connection with a proposal Lee Sin Teck (“Lee”) Lee was charged with having committed an offence under section 32B(1)(a)(aa) read together with section 138(2) of the SCA when GP Ocean submitted through Alliance Merchant Bank Bhd, misleading information to the SC contained in GP Ocean’s Directors’ Report and Financial Statements 31 January 2006.This information was required to be submitted to the SC in connection with GP Ocean’s proposal for listing on the Main Board of Bursa Malaysia Securities Bhd. Lee was charged in the Sessions Court on 18 April 2007On 6 January 2011, the Sessions Court acquitted and discharged him.The prosecution then appealed to the High Court, which on 14 February 2017, overturned the acquittal and ordered Lee to enter his defence on the charge against him.
Trial at the Sessions Court is fixed to resume on 24 October 2017.Lee has since filed an appeal against the decision of the High Court to the Court of Appeal.
6. Submission of misleading information to SC in connection with a proposal Tan Siok Wan (“Tan”) Tan was charged with having committed an offence under section 32B(1)(a)(aa) read together with section 138(2) of the SCA when GP Ocean submitted through Alliance Merchant Bank Bhd, misleading information to the SC  contained in a list titled “GP Ocean Food Berhad Group Top Ten Customer”.This information was required to be submitted to the SC in connection with GP Ocean’s proposal for listing on the Main Board of Bursa Malaysia Securities Bhd. Tan was charged in the Sessions Court on 18 April 2007. On 6 January 2011, the Sessions Court acquitted and discharged her.The prosecution had then appealed to the High Court, which on 14 February 2017, overturned the acquittal and ordered Tan to enter her defence on the charge against her.
Trial at the Sessions Court is fixed to resume on 24 October 2017.Tan has since filed an appeal against the decision of the High Court to the Court of Appeal.
Outcome of Criminal Prosecution Initiated – Constitutional Challenge
1.
  • Making a statement that is misleading in a material particular which is likely to induce the purchase of securities by other persons
  • Having furnished a misleading statement to Bursa Malaysia Securities Berhad
Gan Boon Aun (Gan) Gan, former Chief Executive Officer of Transmile Group Berhad (Transmile) was charged for abetting Transmile in making a statement that was misleading in a material particular relating to Transmile’s revenue in the company’s Quarterly Report on Unaudited Consolidated Results for the Financial Year ended 31 December 2006 which was likely to induce the purchase of Transmile’s shares by other persons, an offence under section 86(b) read together with section 122C(c) of the Securities Industry Act 1983 (SIA).Gan was also charged in alternative with having furnished a misleading statement to Bursa Malaysia Securities Berhad in the same financial statement, an offence under section 122B(a)(bb) read together with section 122(1) of the SIA. Gan was charged in July 2007 with the principal charge.In May 2008, the SC had preferred an alternative charge against Gan.Gan was called to enter his defence on the alternative charge after the close of the prosecution case.In June 2011, Gan made an application to the High Court to challenge the validity of section 122(1) of the SIA arguing that the provision was inconsistent with Article 5(1) of the Federal Constitution.The High Court, in November 2011, declared section 122(1) of the SIA to be unconstitutional and granted a stay of the decision.The SC lodged an appeal to the Court of Appeal and in September 2015, the Court of Appeal overturned the decision of the High Court and affirmed the validity of section 122(1) of the SIA.In January 2016, at the outset of the hearing of the appeal, the Federal Court had posed several questions on whether the appeal was proper before it. Following arguments by both parties, the Federal Court in March 2016, struck out the appeal on the ground that the appeal was incompetent and set aside the decisions of the High Court and the Court of Appeal. The Federal Court further ordered that the matter be remitted to the High Court to examine the record of proceedings and consider whether a decision of questions as to the effect of any provision of the Constitution was necessary for determination by the Federal Court in accordance with sections 30, 84 and 85 of the Courts of Judicature Act 1964. The judgment is reported as Gan Boon Aun v Public Prosecutor [2016] 4 MLJ 265.Following the decision of the Federal Court, in May 2016, the High Court referred five constitutional questions to the Federal Court for determination.In March 2017, Federal Court unanimously upheld the validity of section 122(1) of the SIA and ordered the matter to be remitted to the Sessions Court for continuation of the trial. The grounds of judgment of the Federal Court are available here.
Outcome of Criminal Prosecution Initiated – Persons Charged
1. Insider trading Ewe Lay Peng Ewe Lay Peng was charged under section 188(3)(b) of the CMSA for having communicated to Lim Bun Hwa between 1 December 2007 and 31 December 2007 inside information in relation to the proposed conditional take-over offer by OSPL Holdings Sdn Bhd (OHSB) to acquire all the voting shares in PacificMas Bhd not already owned by OHSB. Ewe Lay Peng was charged on 29 March 2017.
2. Insider trading Lim Boon Cheng Lim Boon Cheng was charged with five counts of insider trading under section 188(2)(a) of the CMSA. He is alleged to have acquired 145,000 units of PacificMas Bhd shares between 18 December 2007 and 31 December 2007 while in possession of inside information in relation to the proposed conditional take-over offer by OSPL Holdings Sdn Bhd (OHSB) to acquire all the voting shares in PacificMas Bhd not already owned by OHSB. Lim Boon Cheng was charged on 29 March 2017.
3. Insider trading Lim Bun Hwa Lim Bun Hwa was charged under section 370(c) of the CMSA with abetting Lim Boon Cheng in acquiring PacificMas Bhd shares between 18 December 2007 and 31 December 2007 under section 188(2)(a) of the CMSA while Lim Boon Cheng was in possession of inside information in relation to the proposed conditional take-over offer by OSPL Holdings Sdn Bhd (OHSB) to acquire all the voting shares in PacificMas Bhd not already owned by OHSB. Lim Bun Hwa was charged on 29 March 2017.
Outcome of Criminal Court Cases and Appeals – Persons Fined and Jailed
1.
  • Holding out as a representative in respect of a regulated activity, namely trading in futures contracts, without holding a Capital Markets Services Representative’s Licence (CMSRL).
  • Carrying on a business in a regulated activity, namely trading in futures contracts, without holding a Capital Markets Services Licence (CMSL).
  • Zamani bin Hamdan
Zamani, who was at the material time, a director of Rantau Simfoni Sdn Bhd (Rantau Simfoni), was charged on 28 October 2011 under Section 59(1) of the Capital Markets and Services Act 2007 for holding himself out as a representative of a CMSL holder to trade in futures contracts without a CMSRL. Zamani was also charged in the alternative for carrying on the business of trading in futures contracts without holding a CMSL, through Rantau Simfoni, an offence under Section 58(1) of the Capital Markets and Services Act 2007, read together with Section 367(1) of the Capital Markets and Services Act 2007. On 30 April 2013, the Sessions Court convicted Zamani on the alternative charge and sentenced him to a fine of RM1 million (in default, 1 year jail).Zamani had filed an appeal to the High Court against the conviction and sentence while the Prosecution filed an appeal against the sentence.On 19 January 2017, the High Court dismissed Zamani’s appeal against his conviction. The High Court further enhanced the sentence by adding an imprisonment sentence of 2 months while reducing the fine to RM215,000 (in default, four months jail). The SC has since filed an appeal to the Court of Appeal against the sentence imposed out by the High Court.
2.
  • Knowingly authorizing the furnishing of a misleading statement to  Bursa Malaysia
  • Chin Keem Feung
  • Shukri bin Sheikh Abdul Tawab
Chin and Shukri, former Independent Non-Executive Directors of Transmile Group Berhad (TGB) who were also former members of TGB’s Audit Committee, were charged under section 122B(b)(bb) of the Securities Industry Act 1983 for knowingly authorising the furnishing of a misleading statement to Bursa Malaysia.The misleading statement was with respect to the unaudited revenue figures which were reported to Bursa Malaysia for both the 4th quarter of 2006 as well as the cumulative period for 2006. Chin and Shukri were charged on 14 November 2007.On 28 October 2011, the Sessions Court found Chin and Shukri guilty under section 122B(b)(bb) of the Securities Industry Act 1983 and they were both sentenced to 1 year imprisonment and fine of RM300,000 (in default 6 months imprisonment).On 17 September 2015, the High Court affirmed the conviction and sentence imposed by the Sessions Court.On 19 January 2017, the Court of Appeal unanimously dismissed the appeal by Chin and Shukri and affirmed their conviction and sentence.