Court Of Appeal Rules in Favour of SC in Insider Trading Case
Acquittal Overturned and Case Remitted to High Court to be Reheard on Merits


Kuala Lumpur, 6 May 2024

The Court of Appeal today unanimously allowed the Securities Commission Malaysia’s (SC) appeal and set aside a 2021 High Court decision which had acquitted former Executive Deputy Chairman of Malaysian Merchant Marine Berhad (MMM) Dato’ Ramesh Rajaratnam (Ramesh) for insider trading.

Justices YA Datuk Vazeer Alam Mydin Meera, YA Dato’ Ahmad Zaidi Ibrahim, and YA Datuk Wong Kian Kheong found that the High Court had erred in acquitting Ramesh without considering the merits of the case.

In delivering the Court of Appeal’s broad grounds, Justice YA Datuk Wong Kian Kheong held that the appellate court has a judicial duty, after trial and on appeal, to consider the merits of the appeal. This means the appellate court has to sieve through the appeal records, consider the written submissions, and listen to the oral submissions before making a just decision on the appeal.

The Court of Appeal accordingly set aside the High Court’s decision in acquitting Ramesh on the first charge and reinstated the earlier conviction and sentence imposed by the Sessions Court. The Court of Appeal further directed that the case be remitted to the High Court and to be heard on the merits before another High Court judge.

The Court of Appeal also maintained the same bail conditions as was earlier imposed on Ramesh by the Sessions Court, namely a bail sum of RM200,000 with one surety and the surrender of his passport to the court.

Ramesh was charged at the Kuala Lumpur Sessions Court on 29 April 2015 with three (3) counts of insider trading under s.188(2)(a) of the Capital Markets and Services Act 2007 (CMSA).

In the first charge, he was alleged to have disposed 5,000,000 MMM shares on 11 January 2010, while in possession of material inside information relating to the proposed downgrade by Malaysian Rating Corporation Berhad of its credit rating on MMM's RM120 million Al-Bai' Bithaman Ajil Islamic Debt Securities from A-ID to BB+ID.

In the second and third charges, he was alleged to have disposed a total of 5,200,800 MMM shares on 19 and 22 February 2010, while in possession of material inside information relating to the classification of MMM as a PN17 company.

On 11 September 2019, after a full trial, the Sessions Court convicted Ramesh on all three (3) charges. He was sentenced to five (5) years imprisonment and a fine of RM3 million (in default 3 years imprisonment) for each charge. The imprisonment terms were ordered to run concurrently. Ramesh subsequently filed an appeal against his conviction and sentence to the High Court.

On 20 May 2021, the High Court allowed Ramesh’s appeal and set aside the conviction and sentence on all three (3) charges. During the SC’s appeal at the Court of Appeal, the SC with the Public Prosecutor’s consent decided not to pursue the appeal in respect of the second and third charges.

Insider trading carries a punishment of an imprisonment term not exceeding 10 years and a fine of not less than RM1 million.


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