KUALA LUMPUR (Nov 24): Supermax Corp Bhd’s group managing director Datuk Seri Stanley Thai Kim Sim was sentenced to a five-year jail term and fined RM5 million for insider trading as former chief executive officer of APL Industries Bhd (APLI).
In a statement today, Securities Commission Malaysia (SC) said the Kuala Lumpur Sessions Court convicted Thai and he was sentenced to a five-year jail term and fined RM5 million, while former remisier Tiong Kiong Choon was sentenced to five years' jail and fined RM10 million.
When contacted, a spokesman for Stanley Thai said both Thai and Tiong will be appealing the decision.
Insider trading offences, under section 188 of the Capital Markets and Services Act 2007 (CMSA), carry a mandatory punishment of imprisonment not exceeding 10 years and a fine of not less than RM1 million.
“Thai was convicted for communicating non-public information between Oct 26 and Oct 29, 2007 to Tiong. Tiong was convicted for two counts of disposing a total of 6.21 million APLI shares while in possession of the same non-public information via accounts belonging to his mother-in-law and his mother. At the time of the commission of the offence, Tiong was also a licensed intra-day trader with a stock broking company,” SC’s statement read.
“The non-public information communicated from Thai to Tiong related to 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 to the previously reported unaudited fourth quarter results for the same financial year, and that APLI would be classified as a PN17 company. APLI made announcements to Bursa Malaysia Securities Bhd about the audit adjustments and its classification as a PN17 company on Oct 31, 2007,” SC explained.
SC said Sessions Court judge Tuan Zulqarnain Hassan had ruled that a deterrent sentence was warranted as insider trading offences were deemed more serious than conventional crimes, given far reaching effects on investors’ confidence and the public as a whole.
“Insider trading is a modern white-collar economic crime. It is serious and is in a category or class of its own,” Zulqarnain said.
The conviction came after a full trial during which 14 witnesses testified for the prosecution while four witnesses testified for the defence.