On 4 November 2020, after a full trial, the Kuala Lumpur High Court allowed the SC’s claim against Dato’ Sreesanthan for insider trading of Worldwide Holdings Berhad shares.

Consequently, the High Court granted the reliefs sought by the SC as follows:

• A declaration that Dato’ Sreesanthan had engaged in insider trading in respect of Worldwide Holdings Berhad shares between 7 June 2006 and 11 July 2006;
• A payment of the sum of RM1,989,402.00 which is equivalent to three times the amount of RM663,134.00 being the difference between the price at which the securities had been disposed of by Dato’ Sreesanthan and the price at which the securities would have been likely to have been disposed of at the time of the disposal, if the material non-public information had been generally available;
• Civil penalty of RM1,000,000;
• An order that Dato’ Sreesanthan be barred from being a director of any public listed company for a period of 10 years (with effect from 18 November 2020);
• Interest at the rate of 5% per annum on the judgment sum effective from 5 November 2020 until full realization thereof;
• Costs of RM100,000.

On 5 September 2022, the Court of Appeal unanimously affirmed the High Court’s finding that Dato’ Sreesanthan had engaged in insider trading of Worldwide Holdings Berhad shares and upheld the reliefs granted by the High Court. In addition, the Court of Appeal awarded the SC costs of RM50,000.

On 25 April 2024, Dato’ Sreesanthan was granted leave to appeal to the Federal Court on 3 questions of law. These can be summarised as follows:

1. Is insider trading under s.89E of the Securities Industry Act 1983 (“SIA”) [now s.188 of the Capital Markets and Services Act 2007 (“CMSA”)] a strict liability offence i.e. by the mere proof that Dato’ Sreesanthan possessed the material non-public information?
   
   If the answer is no, can the SC succeed in its claim against Dato’ Sreesanthan by proving he knew or ought reasonably to have known that the information in his possession was not generally available or must the SC prove that proof that Dato’ Sreesanthan not only knew that the information was not generally available but he also intended to use the said information? 
   
   
2. In determining the materiality of the information in the possession of the insider (as defined s.89B of the SIA and/or s.185 of the CMSA), whether a Court can only consider facts and circumstances at the time of the impugned acquisition or it may consider facts and circumstances occurring after the time of any impugned acquisition?
   
   
3. Does the power given solely to the Attorney General (“AG”) to institute “any proceedings for an offence” under Article 145(3) of the Federal Constitution extend to civil action brought under s.90A (5) of the SIA / s.201(5) of the CMSA for the contravention of s.89E of the SIA/ s.188 of the CMSA, as is mandatory under s.126 of the SIA / s.375 of the CMSA for a prosecution for a contravention of s.89E of the SIA / s.188 of the CMSA?
   
   If the answer is yes, does this render unconstitutional any civil action instituted under s.90A (5) of the SIA / s.201(5) of the CMSA without the consent of the Attorney General?
   
   
   

On 8 April 2025, the Federal Court unanimously dismissed Dato’ Sreesanthan’s appeal and affirmed the findings of both the High Court and Court of Appeal. The Federal Court further awarded the SC costs of RM100,000. 

With regard to the 3 questions of law, the apex court unanimously answered as follows:

Question 1: Section 89E(1) SIA [s. 188(1) CMSA] is not a strict liability provision. Instead, it contains a mental element under s.89E(1)(b) SIA [s.188(1)(b) CMSA], i.e. the defendant knows or ought reasonably to know that the information is not generally available. Following significant amendments to the SIA in 1998, there is no longer a requirement for the SC to prove “intent to use” or “improper use”.

Question 2: The Court can assess the materiality of the information not merely at the time of the impugned trading but can also consider post-trading conduct and behaviours. Materiality is a mixed question of law and fact which must be determined objectively.

Question 3: The SC is not required to obtain the AG’s consent before instituting civil proceedings for contravention of s.89E(2) SIA [s.188(2) CMSA]. The powers of the AG under Article 145(3) of the Federal Constitution are crystal clear and apply only to prosecution and proceedings for criminal offences.