KUALA LUMPUR: Two securities firms and a dealer's representative were fined a total of RM1mil by the Sessions Court after they were found guilty for short-selling 141,000 units of Proton Bhd shares seven years ago.
Credit Lyonnais Securities (Singapore) Pte Ltd was fined RM400,000 and CIMB Securities Sdn Bhd RM400,000. Its dealer Ng Wai Hong was fined RM200,000.
The court had found them guilty on Monday and had fixed yesterday for mitigation and sentencing.
Judge Mohamad K. Abdul Rahman imposed the fines and warned the three that short-selling was a serious offence and a request for a bound-over, made by their counsel, was not suitable for such an offence.
In December 1997, the three claimed trial to allegedly committing the offence on Aug 14 that year at CIMB's premises at Commerce Square in Jalan Semantan here.
The Singaporean company is the first foreign firm charged with the offence.
The Securities Industry Act stipulates that a person shall not sell securities unless at the time he sells them he has “a presently exercisable and unconditional right to vest the securities in the purchaser”.
The offence provides for a maximum fine of RM1mil or imprisonment of up to 10 years, or both.
At the outset of the proceedings, Ng's counsel Harjeet Singh Sidhu pleaded for a non-custodial sentence, saying a fine was sufficient.
“The accused who is a first time offender has an exemplary record in his company.
“My client did not derive any monetary gain from the transaction,” he said.
Harjeet Singh said the role played by Ng was minimal and there was no evidence of a pre-arranged plan.
He said it was a technical mistake and the offence was the first of its kind.
Counsel for Credit Lyonnais Securities, Tan Hock Chuan, said the conviction will have a repercussion on the company, especially when it comes to renewing its licence.
He urged the court to impose a nominal fine on the company.
Counsel for CIMB, Shahul Amirudin, in mitigating for leniency, said the company had co-operated with the prosecution, adding that the firm has an unblemished record and reputation.
Pressing for the maximum fine, Securities Commission prosecuting officer Masleena Zaid said the penalty for the offence itself shows that it was a serious offence.
“There is evidence to show there was a cover up to hide the offence,” she said.
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