Supermax CEO charged with insider trading of APL Industries’ shares

PETALING JAYA: Supermax Corp Bhd's CEO Datuk Seri Stanley Thai was charged at the Kuala Lumpur Sessions Court yesterday with insider trading of APL Industries Bhd (APL) shares, sending shares of the glove maker spiraling down by 16.49% yesterday.
Supermax fell by 32 sen to close at RM1.62 on news of the charge against Thai.
Thai, 54, was charged with one count of communicating non-public information between Oct 26, 2007 and Oct 29, 2007 to Tiong Kiong Choon, a remisier with a stock broking company, said the Securities Commission (SC).
Thai was at the material time, the CEO of APL, a company listed on Bursa Malaysia Securities Bhd.
Tiong was charged by the SC on Dec 9, 2014 at the Kuala Lumpur Sessions Court with disposing of 6,208,500 APL shares on Oct 26, 2007 and Oct 29, 2007 while in possession of the non-public information via accounts belonging to his mother-in-law and his mother.
In addition, the SC yesterday also charged Thai's wife and Supermax group managing director Tan Bee Geok as well as his sister-in-law.
Bee Geok, who was then the group executive director of APL was charged for communicating non public information to her sister, Bee Hong, between Oct 23 and Oct 31, 2007.
One charge was also preferred by the SC against Bee Hong for disposing 350,000 units of APLI shares on Oct 31, 2007, which were held in her account, while in possession of the same non-public information.
Thai, Bee Geok and Bee Hong all claimed trial to the respective charges preferred.
Sessions Court judge Abdul Rashid Daud fixed bail at RM250,000 for Thai, while Bee Geok and Bee Hong were fixed at 250,000 and 150,000 respectively.
Thai and Bee Geok have been ordered to surrender their international passports to the court on Feb 3 and Feb 4, 2015 respectively, while Bee Hong's passport was surrendered to the court yesterday. The case is set for mention on Jan 15, 2015.
The SC alleged that the non-public information referred to in all the charges related to the audit adjustments proposed by APLI's auditors which resulted in APLI reporting a higher loss amounting to RM21.1 million for the financial year ended 30 June 2007, as compared to the unaudited results of RM4.5 million for the same period. The adjustments also resulted in APLI being designated as a PN 17 company.
The offences carry a punishment of mandatory imprisonment not exceeding 10 years and a fine of not less than RM1 million.
SC director of enforcement Ahmad Fairuz Zainol Abidin stated that the abuse of inside information can seriously undermine market integrity and investor confidence. He emphasised that this is an area that the SC will continue to monitor and actively enforce.
In a separate media statement yesterday, Supermax said both Thai and Bee Geok have fully cooperated with the SC throughout the investigations related to APLI shares.
"The above-mentioned charges on both Thai and Bee Geok are strictly related to transactions in APL shares which allegedly occurred in 2007.
"The charges against them are therefore related to facts allegedly occuring seven years ago," it said.
Supermax stated that it is business as usual at the company as well at all its subsidiaries and overseas distribution centres.
"Business operations are not affected and are running as usual in all Supermax offices and factories," it assured investors.