Leong charged with Maxbiz insider trading

PETALING JAYA: Datuk Andrew Leong Wye Keong, a former substantial shareholder of delisted Maxbiz Corp Bhd, has been charged by the Kuala Lumpur Sessions Court with four counts of insider trading.

The Securities Commission (SC) said in a statement that Leong was charged under section 188(2)(a) of the Capital Markets and Services Act 2007 (CMSA) for disposing of 2.13 million units of Maxbiz shares in his son’s account on Dec 30, 2010.

Leong was also charged with disposing 8.1 million more Maxbiz shares in his own account between Dec 30, 2010 and Jan 18, 2011, while in possession of inside information.

“The material non-public information for the first three charges relates to the decrease in Maxbiz’s shareholders’ equity that brought it close to being classified as financially distressed.

“The material non-public information in the fourth charge concerns the classification of Maxbiz as a Practice Note 17 (PN17) company. Maxbiz was previously listed on the Main Market of Bursa Malaysia before its delisting on March 26, 2012.”

The SC said Leong claimed trial yesterday, with judge Zulqarnain Hassan fixing bail at RM600,000 with two sureties.

“Insider trading is punishable with an imprisonment term not exceeding 10 years and a fine of not less than RM1mil under the CMSA.”

The SC also alleged that Leong had obtained the inside information from Datuk Vincent Leong Jee Wai, the managing director of Maxbiz at the material time.

Jee Wai was earlier charged on May 22 at the Kuala Lumpur Sessions Court with communicating inside information to Leong. If found guilty, he faces up to 10 years in prison and a fine of not less than RM1mil.

In an earlier statement, the SC said Jee Wai was charged with two counts of communicating material non-public information between November 2010 and January 2011 to Leong, when he should have known that Leong would tend to dispose of the Maxbiz shares.

“The material non-public information for the first charge relates to the decrease in Maxbiz’s shareholders’ equity which was close to Maxbiz being classified as financially distressed.

“The second charge concerns the classification of Maxbiz as a PN17 company.”

Bursa had delisted chemical-trading firm Maxbiz in March 2012. The company was plagued by financial problems and scandals since it took over the listing status of Geahin Engineering Bhd via a reverse takeover in 2004.

For the financial year ended Dec 31, 2011, the company reported a net loss of RM13.43mil compared with a net loss of RM2.39mil in the previous corresponding period.

Revenue was lower at RM2.35mil compared with RM7.19mil the previous year.