KUALA LUMPUR: The High Court here on Friday (Jan 23) acquitted former Malaysian Merchant Marine Bhd (MMM) deputy executive chairman Datuk Ramesh Rajaratnam of an insider trading charge.
Judge K. Muniandy, who is now a Court of Appeal judge, delivered the decision after allowing Ramesh's appeal to set aside his conviction, five-year prison sentence and RM3mil fine imposed by the Sessions Court in 2019.
In his judgment, Muniandy ruled that the sale of MMM shares in January 2010 was not motivated by inside information but was carried out in accordance with a pre-determined plan or an announced corporate strategy.
He said that by December 2009, the market was already aware of MMM's financial difficulties, including the possibility of a bond suspension, and that Ramesh himself had suffered personal losses.
The proceeds from the share sale, he added, were used to meet the company's expenses.
"The court is satisfied that the purpose of the transaction was not to make a profit or to avoid a loss, but to ensure the survival of the company. Accordingly, the conviction and sentence are set aside, and the appellant is acquitted," he said.
Ramesh was charged in the Sessions Court here on April 29, 2015, with three counts of insider trading under Section 188(2)(a) of the Capital Markets and Services Act 2007 (CMSA).
For the first charge, he was accused of disposing of five million Malaysian Merchant Marine Bhd (MMM) shares on Jan 11, 2010, while in possession of material non-public information relating to a proposed credit rating downgrade by Malaysian Rating Corporation Bhd of Al-Bai Bithaman Ajil Islamic Debt Securities amounting to RM120mil, from A-ID to BB+ID.
For the second and third charges, Ramesh was alleged to have disposed of 5,200,800 MMM shares on Feb 11 and 22, 2010, while in possession of material non-public information concerning MMM's classification as a PN17 company.
On Sept 11, 2019, the Sessions Court convicted Ramesh on all three charges and sentenced him to five years' imprisonment and a RM3mil fine for each charge, with the jail terms to run concurrently. In default of payment, he was to serve three years' imprisonment.
Ramesh subsequently filed an appeal, and on May 20, 2021, the High Court allowed his application, set aside the conviction and sentence, and acquitted him of all three charges.
The Securities Commission Malaysia (SC) then appealed against the decision.
On May 6, 2024, the Court of Appeal set aside the High Court's acquittal on the first charge and reinstated the conviction and sentence imposed by the Sessions Court.
The Court of Appeal also ordered the case to be remitted to the High Court for a rehearing before a different judge, while maintaining bail at RM200,000 with one surety and ordering Ramesh to surrender his passport to the court. - Bernama
