APL Industries ex-ED Cheryl Tan, sister jailed five years, fined RM7m each for insider trading

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KUALA LUMPUR (Aug 9): The Kuala Lumpur Sessions Court today convicted a former executive director of APL Industries Bhd (APLI), Datin Seri Cheryl Tan Bee Geok, and her sister Tan Bee Hong of insider trading offences.

Both were sentenced to a five-year jail term and fined RM7 million each. APLI was one of the companies under the Supermax Corp Bhd’s group of companies.

Under section 188 of the Capital Markets and Services Act 2007, an insider trading offence is punishable with an imprisonment term of not exceeding 10 years and a fine of not less than RM1 million.

In a statement today, the Securities Comission Malaysia (SC) said Bee Hong was convicted of insider trading as she was found to have disposed 350,000 APLI shares while in possession of material non-public information.

Her sister Bee Geok, who was an executive director of APLI in charge of finance then, was convicted of communicating the said non-public information to her between Oct 23, 2007 and Oct 31, 2007.

"Bee Geok had tipped her sister on the audit adjustments proposed by APLI’s auditors, which resulted in APLI reporting a higher loss for the financial year ended June 30, 2007 compared with the previously reported unaudited Q4 results for the same financial year.

"The audit adjustments led to APLI being classified as a Practice Note 17 (PN17) company," it added.

The SC noted that APLI made announcements to Bursa Malaysia about the audit adjustments and its classification as a PN17 company on Oct 31, 2007. The sisters were tried together in a full trial, where 13 witnesses testified for the prosecution and four witnesses for the defence.

In another case, the High Court today dismissed an application by Bee Geok's spouse Datuk Seri Stanley Thai Kim Sim to be reappointed as a director of Supermax.

The SC said the application was sought by Thai after he was disqualified as a director of Supermax following his conviction of an insider trading offence in November 2017.

Supermax shares closed down 6 sen or 1.38% at RM4.28 today, with 2.47 million shares done, bringing a market capitalisaion of RM2.26 billion.