Two claim trial over issuing shares without prospectus

KUALA LUMPUR: Two former directors of a gold trading company have claimed trial at the Sessions court over issuing company shares worth RM400mil without a prospectus.

The two founder Chong Yuk Ming, 49, and former corporate advisor S. Balachandran, 56 of Bestino Group Bhd, pleaded not guilty after their charges were read to them before judge Ahmad Kamar Jamaluddin yesterday.

They were each accused with a main charged and an alternative charge.

In the main charge, they were both as directors of the company, accused of issuing 400 million redeemable preference shares (worth RM400mil) without a prospectus registered with the Securities Commission (SC).

In the alternative charge, they were both accused of distributing application forms for the redeemable preference shares, without them being accompanied by a copy of a prospectus registered by the SC.

They were said to have done so at the company's office at No 80-B, Jln Sultan Yussuf, Ipoh, Perak, between Nov 3, 2008, and June 16, 2009.

Both actions amount to offences under Section 232(1) and 232(2) of the Capital Markets and Services Act 2007.

If convicted, they can each be fined not more than RM10mil, or jailed not more than 10 years, or both.

The court granted both the accused RM300,000 bail each, with one surety, and ordered Balachandran to surrender his passport to the court. Chong's passport had already been submitted to the court in Ipoh.

The court also fixed June 1 for mention.