High Court rules for the SC in Axis Corp insider trading case

PETALING JAYA: The High Court has declared a judgment in favour of Securities Commission Malaysia (SC) in an insider trading case involving the shares of Axis Incorporation Bhd.
SC said in a statement earlier that Axis former director Koh Tee Jin was declared to have breached section 188 (3)(a) of the Capital Markets and Services Act 2007 (CMSA) when he communicated inside information to his father Koh Thiam Seong and sister Koh Hui Sim.
Thiam Seong and Hui Sim were declared to have breached section 188 (2)(a) of the CMSA by disposing a total of 244,000 and 739,800 of Axis shares respectively between July 9, 2008 and July 30, 2008 while in possession of material non-public information.
 
SC said the material information referred to in the action is related to unresolved issues in Axis’ financial statements for financial year ended March 31, 2008, which made it unable to submit its audited financial statement for the financial year ended Dec 31, 2008.
“ The announcement relating to the material information was made on July 30, 2008,” it said.
 
Following the judgment in default of appearance, Tee Jin was ordered by the court to pay SC a total sum of three times the loss avoided by Thiam Seong and Hui Sim, amounting to RM3.5 million.
Thiam Seong and Hui Sim were ordered to pay SC RM739,389 and RM2.8 million respectively, which was three times the loss each of them had avoided from the difference in price of Axis shares disposed against the likely price, had the material non-public information been generally available.
 
All three defendants were also ordered to pay SC a civil penalty of RM1 million each, with costs and interest. They are also barred from being a director of any public-listed company for a period of five years.