The SC said, contrary to the misconception, it has taken enforcement action directly against individual directors of PLCs. These prosecutions are in addition to action taken against licensed market intermediaries. This year alone, from 1 January - 28 November 2000, the SC has charged three directors of PLCs and a director in a futures broking company for breaches of securities laws involving, among others, submission of false statement to the stock exchange in relation to the affairs of a PLC and falsification of records.
Last year the SC had also charged six directors for offences of fraud, market manipulation and submitting a false statement to SC in a proposal. Four of those charged last year are directors of PLCs while the other two were directors of stockbroking companies. The SC has also imposed compounds against two directors of PLCs in the past 11 months of the year for offences involving submission of a false or misleading statement in a proposal and has recommended to the Public Prosecutor for two more to be compounded for breach of Securities Commission Act 1993 provisions.
The SC explained that its primary jurisdiction over corporations and directors is established through securities legislation, such as the Securities Commission Act 1993, Securities Industry Act 1983 and the Futures Industry Act 1993 as well as its Policies and Guidelines on Issues/Offer of Securities and the Code on Take-Overs and Mergers 1998. The SC's enforcement action would, therefore, relate to contravention of these laws, regulations and rules. The SC reiterated that both errant PLCs and their directors may be liable for breaches of securities laws.
The SC added that the coming into force of amendments to the KLSE Listing Requirements will ensure that the Exchange itself has the legal authority to effectively enforce the listing requirements against individual directors of public-listed companies. The amendments to the KLSE Listing Requirements have been approved by the SC and its details will be announced in January 2001.
