KUALA LUMPUR (June 13): The Securities Commission Malaysia (SC) has charged Datuk Ishak Ismail, former largest shareholder in Kenmark Industrial Co (M) Bhd, with three charges for making a misleading statement and insider trading of 58.69 million shares in the company in June 2010.
Ishak has claimed trial for the three charges.
All three charges, upon conviction, carry a minimum fine of RM1 million and an imprisonment of not more than 10 years.
The Sessions Court Judge Mat Ghani Abdullah fixed bail at RM600,000 with one surety, and Ishak was not required to surrender his passport.
The court also set July 15 for case management.
Ishak was charged for making a misleading statement in a material particular between June 4 and 5, 2010, which was published in The Star on June 5.
The news report had quoted him on the reason he bought shares in Kenmark, in which he said, "It is a good company. I checked and there is nothing wrong with the company. There is a misunderstanding."
According to the charge sheet, the said statement was likely to induce the purchase of Kenmark shares by other people, when he ought reasonably to have known that the said statement was misleading in a material particular.
Hence, Ishak was charged for committing an offence under Section 177(b) of the Capital Market and Services Act (CMSA), punishable under Section 182 of the same Act.
Ishak also faced two insider trading charges for the disposal of 27.69 million shares held by Unioncity Enterprices Ltd on June 9 and the disposal of 31 million shares held by BHLB Trustee Bhd for a discretionary trust for the family of Ishak on June 11 while in possession of information that was not generally available, a reasonable person would expect it to have a material effect on the price or value of the said share.
Such information being that two of its clients had gone bankrupt and EON Bank Bhd did not agree to uplift the receivership of Kenmark as at June 8, 2010.
Ishak was charged for committing an offence under Section 188(2)(a) of CMSA, punishable under Section 188(4) of the same Act.
Ishak is currently involved in oil palm in Indonesia, hotels in South Africa and Cambodia, and the aviation business. He is one of the directors in Amrul Nizar Anuar Resources Sdn Bhd, which solely owns Raya Airways.
Ishak's counsel Datuk Tan Hock Chuan has submitted during the bail hearing that Ishak's businesses required him to travel overseas and sought not to surrender his passport, and the court can set a higher bail sum in place of the need for the accused to surrender his passport.
The court agreed and set the bail at RM600,000 with one surety.
The prosecution team was led by SC deputy public prosecutor Roz Mawar Rozain.
Ishak was a prominent corporate figure in the 1990s. He was involved with the fight for KFC Holdings (M) Bhd and controlled the fast food operator and Idris Hydraulics (M) Bhd, among others.
Ishak and his family emerged as the largest shareholder of Kenmark on June 10, 2010 after they acquired 32.26% shares in the company.
He bought the shares on June 1 and 2, 2010 after investors dumped the group's share following the disappearance of its managing director and largest shareholder James Hwang.
The acquisition gave a paper gain of RM10 million to Ishak after he sold the shares. However, the SC has filed an injunction to prevent him from utilising the gains he received from the sale, as it suspected there is breach of securities law. The case is ongoing.
Kenmark, which was manufacturing computer workstation, has ceased operation and fell into Practice Note 17 status.