KUALA LUMPUR (July 29): Kencana Petroleum Bhd's former executive director Datuk Yeow Kheng Chew, better known as KC Yeow, along with two individuals were charged with insider trading at the Sessions Court here today.

The other two individuals, Paulene Chee Yuet Fang and her remisier Tan Yee Chee were charged for abetment.

The trio were alleged to have committed the offence in relation to the proposed merger of Kencana Petroleum Bhd and SapuraCrest Petroleum Bhd in 2011.

In the local corporate scene, Yeow is known as the partner of Datuk Mokhzani Mahathir in the oil & gas business.

Yeow was the former non-executive director of SapuraKencana Petroleum Bhd. He relinquished his position on March 4, 2015 for personal reasons.

The three claimed trial to the charge. Yeow was out on bail for RM1 million with two sureties, while Chee and Tan were bailed at RM800,000 and two sureties. The court did not request them to surrender their passport.

The presiding Judge Zulqarnian Hassan has fixed the case management on Aug 11.

According to the charge sheet, Yeow, 64, was charged for buying 1.16 million shares in Kencana Petroleum Bhd through Chee's Central Depository System account, while in possession of information on the proposed merger of Kencana Petroleum and SapuraCrest on July 8, 2011, three days before the offer letter for the merger being issued.

The charge further stated Yeow would have expected such information to have had a material effect on the price of the shares, and ought reasonably to have known that such information was not generally available.

Therefore, he was accused of committing an offence under section 188(2)(a) of the Capital Markets and Services Act 2007 (CMSA).

Meanwhile, Chee and Tan were charged for abetting Yeow in commission of the insider trading offence, and that they have committed an offence under Section 370 (c) of the CMSA, read together with section 188(2)(a) of the CMSA.

Upon conviction, the trio shall be punished to imprisonment for a term not exceeding 10 years, and to a fine of not less than RM1 million.

Recall that the boards of SapuraCrest Petroleum Bhd and Kencana Petroleum Bhd have agreed to their merge on Aug 5, 2011.

The merger, worth a total of RM11.85 billion, was carried out under Integral Key Sdn Bhd (IKSB), a special purpose vehicle. The letter of offer from IKSB was dated July 11, 2011.