Both men had been charged in April 2009 under section 122B(b)(bb) of the Securities Industry Act 1983 (SIA) for authorising the furnishing of misleading information to Bursa with regard to MEMS’ reported revenue of RM73.4 million which was contained in its unaudited Condensed Consolidated Income Statements for the twelve-month period ended 31 July 2007. The revenue was misleading as it included 41% of fictitious sales amounting to RM30.17 million. 

In its submission, the SC had argued that taking into account the severity of the offence which involved a very large figure in the financial records, a fine alone was not a deterrent enough sentence. The SC submitted that, as directors of a public-listed company, both men had a fiduciary duty not only to the company but also to the investing public.

In allowing the appeal, the High Court judge stated that the capital market is the heart of the nation’s economy and that its integrity is important to obtain the confidence of investors both locally and overseas. 

 

The SC will continue to seek deterrent sentences for breaches of securities laws in cases that undermine public and investor confidence in the integrity of the Malaysian capital market.