Civil Action in 2020

No.

Offence

Defendants

Brief facts of the case

Outcome

1. Insider trading Chang Kee Soon

On 10 June 2020, a civil action was initiated against Chang Kee Soon for breach of section 188(2) of the Capital Markets and Services Act 2007 (CMSA).

In respect of the acquisition of HPI Resources Berhad (HPI) shares by Chang Kee Soon, the SC sought, among others, the following:

  • A declaration that Chang Kee Soon has contravened section 188(2) of the CMSA;
  • Payment of the sum of RM1,198,702.83 which is equivalent to three (3) times the amount of RM399,567.61 being the difference between the price at which the said shares were acquired and the price at which the said shares would have been likely to have been acquired at the time of the trading if the Inside Information had been generally available;
  • A civil penalty of RM1,000,000.00;
  • An order that Chang Kee Soon be removed of directorship and management positions in any public listed companies in Malaysia;
  • An order that Chang Kee Soon be barred from being a chief executive or director from being involved in the management, directly or indirectly of any public listed company in Malaysia for a period of 5 years from the date of judgment;
  • An order that Chan Kee Soon be restrained from trading in any securities on Bursa Malaysia for a period of 5 years from the date of judgment.
  • Interest; and
  • Costs.

-

2. Use of manipulative and deceptive devices.
  1. Wong Shee Kai (No. NRIC: 811212-14-5957)
  2. Teh Sew Wan (No. NRIC: 500127-10-5696)
  3. Wong SK Holdings Sdn. Bhd. (Syarikat No.: 729123-K)

On 5 May 2020, a civil action was initiated against Wong Shee Kai (Ricky Wong), Teh Sew Wan and Wong SK Holdings Sdn. Bhd. for breach of section 179(a) and/or section 179(b) of the Capital Markets and Services Act 2007 (CMSA) in respect of their involvement in several schemes to defraud Bright Packaging Industry Berhad (Bright Packaging) in connection with the sale of securities via Bright Packaging’s rights issue, private placement and ESOS exercises.

The SC sought for the following:

  • A declaration that Wong Shee Kai, Teh Sew Wan and Wong SK Holdings Sdn. Bhd. had contravened 179(a) and/or section 179(b) of the CMSA;
  • That Wong Shee Kai and Teh Sew Wan be jointly and severally liable to pay the sum of RM140,323,500.00 being three (3) times the amount of their pecuniary gain of RM46,774,500.00;
  • That Teh Sew Wan and Wong SK Holdings Sdn. Bhd. be jointly and severally liable to pay the sum of RM27,900,000.00 being three (3) times the amount of their pecuniary gain of RM9,300,000.00;
  • That Wong Shee Kai, Teh Sew Wan and Wong SK Holdings Sdn. Bhd. pay a civil penalty of RM1,000,000.00 each;
  • That Wong Shee Kai, Teh Sew Wan and Wong SK Holdings Sdn. Bhd. be restrained from disposing or dealing with their assets up to the value of RM169,223,500.00 pending final settlement of the civil action;
  • That the SC would not be required to compensate Wong SK Holdings Sdn. Bhd. or any nominees, shareholders and/or entities related to Wong Shee Kai, Teh Sew Wan and Wong SK Holdings Sdn. Bhd. pursuant to section 200(3)(b) and/or section 360(1)(M) of the CMSA;
  • That Wong Shee Kai and Teh Sew Wan be barred from becoming a chief executive, director or be involved in management directly or indirectly, of any other public company in Malaysia permanently or for such period the Court deems appropriate;
  • Interest; and
  • Costs.

On 8 May 2020, the High Court ordered that Wong Shee Kai, Teh Sew Wan and Wong SK Holdings Sdn. Bhd. be restrained from disposing or dealing with their assets up to the value of RM169,223,500.00 pending final settlement of the civil action.

The High Court further ordered that  Wong Shee Kai, Teh Sew Wan and Wong SK Holdings Sdn. Bhd. Were to disclose all of their assets to the SC.
3.

Insider trading

Lee Swee Eng

On 29 April 2020, a civil action was initiated against Lee Swee Eng for an alleged breach of section 188(2) of the Capital Markets and Services Act 2007 (CMSA) in respect of the disposal of KNM Group Berhad shares by Lee Swee Eng. The SC sought, among others, the following:

  • A declaration that Lee Swee Eng has contravened section 188(2) of the CMSA;
  • Payment of the sum of RM11,003,574.00 which is equivalent to three (3) times the amount of RM3,667,858.00 being the difference between the price at which the said shares were disposed and the price at which the said shares would have been likely to have been disposed at the time of the disposal, if the Inside Information had been made generally available;
  • A civil penalty of RM1,000,000.00;
  • An order that Chang Kee Soon be removed of directorship and management positions in any public listed companies in Malaysia;
  • An order that Lee Swee Eng be barred from being a chief executive or director from being involved in the management, directly or indirectly of any public listed company in Malaysia for a period of 5 years from the date of judgment;
  • An order that Lee Swee Eng be restrained from trading in any securities on Bursa Malaysia for a period of 5 years from the date of judgment.
  • Interest and Costs.

-

4. Insider Trading Dato' Raymond Yap Wee Hin

On 9 April 2020, a civil action was initiated against Dato' Raymond Yap for breach of section 188(2) of the Capital Markets and Services Act 2007 (CMSA).

In respect of the disposal of Patimas Computers Berhad (Patimas) shares by Dato' Raymond Yap, the SC sought, among others, the following:

  • A declaration that Dato' Raymond Yap has contravened section 188(2) of the CMSA;
  • payment of the sum of RM3,286,770.00 which is equivalent to three (3) the amount of RM1,095,590.00 being the difference between the price at which the said shares were disposed and the price at which the said shares would have been likely to have been disposed of at the time of the trading if the Inside Information had been generally available;
  • A civil penalty of RM1,000,000.00;
  • An order that Dato' Raymond Yap be barred from being a Director of any public listed company for a period of 5 years;
  • Interest; and
  • Costs.

-

5. Insider Trading Dato' Ng Back Heang

On 9 April 2020, a civil action was initiated against Dato' Ng for breach of section 188(2) of the Capital Markets and Services Act 2007 (CMSA).

In respect of the disposal of Patimas Computers Berhad (Patimas) shares by Dato' Ng, the SC sought, among others, the following:

  • A declaration that Dato' Ng has contravened section 188(2) of the CMSA;
  • payment of the sum of RM1,237,500.00 which is equivalent to three (3) the amount of RM412,500.00 being the difference between the price at which the said shares were disposed and the price at which the said shares would have been likely to have been disposed of at the time of the trading if the Inside Information had been generally available;
  • A civil penalty of RM1,000,000.00;
  • An order that Dato' Ng be barred from being a Director of any public listed company for a period of 5 years;
  • Interest; and
  • Costs.

-

Outcome of Civil Action Taken

6. Insider trading Tan Giap How (Tan)

On 12 July 2019, a civil action was initiated against Tan for breach of section 188(3)(a) of the Capital Markets and Services Act 2007 (CMSA).

In respect of the acquisition of Hirotako Holdings Berhad (Hirotako) shares by Dato' Lim Lean Heng, the SC sought from Tan, among others, the following:

  • payment of the sum of RM800,280.00 which is equivalent to 3 times of profit made by Dato' Lim Lean Heng
  • a civil penalty of RM1,000,000.00
  • that Tan be restrained from trading in any counter on Bursa Malaysia for a period of five (5) years from the date so ordered by the court.

As for the acquisition of Hirotako shares by Ng Ee Fang, the SC sought from Tan, among others, the following:

  • payment of the sum of RM578,640.00 which is equivalent to 3 times of profit made by Ng Ee Fang
  • a civil penalty of RM1,000,000.00
  • that Tan be restrained from trading in any counter on Bursa Malaysia for a period of five (5) years from the date so ordered by the court

On 9 March 2020, the High Court recorded a consent judgment between SC and Tan and ordered among others:

  • that there is a breach of section 188(3)(a) of the CMSA by Tan as acknowledged by Tan
  • that Tan pays to the SC a sum equivalent to 1.5 times of the amount of profit made by Dato' Lim Lean Heng which amounts to RM400,140.00
  • that Tan pays to the SC a sum equivalent to 1.5 times of the amount of profit made by Ng Ee Fang which amounts to RM289,320.00
  • that Tan pays to the SC a civil penalty of RM200,000.00
  • that Tan, whether by himself, his agent or otherwise howsoever, is restrained from trading in any counter on Bursa Malaysia for a period of five (5) years from the date of the consent judgement
that Tan is barred from holding a directorship in a public listed company for a period of five (5) years from the date of the consent judgment.
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