PETALING JAYA: The Court of Appeal has ruled in favour of the Securities Commission Malaysia (SC) and affirmed the High Court’s judgment, which found a former Executive Director of Patimas Computers Bhd liable for insider trading.
In a statement, the SC said the High Court had in 2022 found Datuk Ng Back Heang liable for insider trading under section 188(2)(a) of the Capital Markets and Services Act 2007 (CMSA).
In its decision the court unanimously dismissed Ng’s appeal with costs of RM30,000 and upheld the High Court’s judgment ordering him to pay RM1.24mil in disgorgement to the SC.
This is equal to three times the losses avoided by Ng, as a result of the insider trading.
Ng was also ordered to pay the SC a civil penalty of RM700,000 and is barred from being appointed as a director of any public listed company for five years, starting from the date of the High Court judgment on Nov 17, 2022.
The High Court also granted the SC RM100,000 in costs.
The breach occurred when Ng disposed of 16.5 million Patimas shares that he owned between May and July 2012, while in possession of material non-public information relating to audit queries and issues about suspicious transactions between Patimas and its top debtors.
The matter had been raised and discussed by Patimas’ external auditor during a meeting with the company’s management.
On July 31, 2012, Patimas’ board of directors announced to Bursa Malaysia that the company would not be able to issue the annual audited financial statements for the financial period from Jan 1, 2011 to March 31, 2012 due to unresolved significant audit findings/queries.
“The SC views insider trading as a serious breach as it undermines the integrity of the capital market and subsequently erodes investor confidence in the stock market.
“The decision of the Court of Appeal sends a clear message that such breaches will not be tolerated by the SC as well as the courts,” said the SC.
