KUALA LUMPUR (April 12): AirAsia Group Bhd co-founder and executive chairman Datuk Kamarudin Meranun has entered into a settlement with the Securities Commission Malaysia (SC) amounting to RM3.64 million for insider trading of Malaysian Airline System Bhd (MAS) shares in August 2011.

Kamarudin is the controlling shareholder of AirAsia. He currently owns a 32.18% stake in AirAsia through his equity interest in Tune Live Sdn Bhd and Tune Air Sdn Bhd.

Kamaruddin had on April 2, 2019 agreed without admission or denial of liability to settle a claim that the SC was proposing to institute against him for acquiring 5.66 million MAS shares between Aug 1 and 5, 2011, according to the statement on SC website.

To recap, on Aug 9, 2011, the national carrier, AirAsia and AirAsia X Sdn Bhd (AAX) entered into a Comprehensive Collaboration Framework.

The agreement involved Khazanah Nasional Bhd and Tune Air Sdn Bhd entering into a share swap agreement so that there will be cross-holding of shares resulting in Tune Air Sdn Bhd obtaining a 20.5% stake in MAS and Khazanah obtaining 10% in AirAsia. 

It was also agreed that MAS was to be a full-service premium carrier while AirAsia and AAX would be regional low-cost and medium-to-long haul low-cost carriers respectively.

Following public outcry, the deal was aborted eight months later.

Besides his case, a director of AmanahRaya Investment Management Sdn Bhd, which is a wholly-owned subsidiary of Amanah Raya Bhd, named Abdul Radzim Abdul Rahman and one Mohamed Radzif Mohamed Shamsudin had, on April 9, 2019, also entered into a settlement with the SC worth RM750,000 respectively for the same offence.

Both Radzim and Radzif acquired 3.16 million and 2.5 million MAS shares respectively.

SC noted that all of the shares acquisition were done through the account of Nor Ashikin Khamis’ and Malizan Mahmood whilst in possession of inside information contrary to Section 188(2) of the Capital Markets and Services Act 2007 (CMSA).

"The settlement was reached following letters of demand sent by the SC pursuant to its civil enforcement powers under the securities laws," SC said.  

"The amount disgorged from Datuk Kamarudin Meranun is equivalent to three times the difference between the price at which the shares were acquired and the price at which the shares would have been likely to have been acquired at the time of the acquisition, if the information had been generally available," it explained.

The SC added that the the monies recovered will be applied in accordance with Section 201(7) of the CMSA.