The court affirmed that ignorance of the law is not a defense and defendants failed to fulfill mandatory obligations under the Securities Commission Act, specifically regarding compulsory offers for shares.

[1] This is an originating motion filed by the plaintiff the Securities Commission of Malaysia ('Commission'), seeking statutory reliefs pursuant to s. 33D(3) of the Securities Commission Act 1993 ('Act') , to compel the defendants to comply with a direction of the Commission issued on 5 November 2003 pursuant to subsection (1) of the same s. 33D .

[2] The relevant parts of s. 33D of the Act provide:

33D. Action by Commission in cases of non-compliance with Code and rulings.

(1) Wheresubsection 33A(4) any person who is under an obligation to comply with, observe or give effect to the provisions of the Code or any ruling made under , fails to comply with, observe or give effect to any such provision of the Code or ruling (hereinafter referred to as the 'defaulting person'), the Commission may take one or more of the following actions:

(a) direct the defaulting person to comply with, observe or give effect to any such provision of the Code or ruling;

(2) ...

(3) The Court may, in a case where the Commission gives a direction under paragraph (1)(a), on an application by the Commission, make an order directing the defaulting person to comply with, observe or give effect to those provisions of the Code or rulings ...

[3] In the present case I granted the orders sought by the plaintiff (with costs). They are as follows:

(1) an order that, within 21 days of being ordered to do so, each of the defendants whether by themselves or by their servants or agents, do circulate the documents relevant to the compensation scheme to all the shareholders of Takaso; and

(2) an order that, within 21 days of the deadline imposed in the said relevant documents, the defendants do pay the respective portions to all the shareholders of Takaso who are entitled to receive proceeds of the compensation;

(3) an order that, in the event any defendant fails to comply with the orders referred to in paras (1) and (2) above within the specified period, the plaintiff be entitled to take execution proceedings under the Rules of the High 1980 and/or seek leave of this Court to punish such defendant for contempt of Court for failure to comply with orders of Court.

[4] I shall now give my grounds.

[5] The Securities Commission is a body corporate established under s. 3 of the Securities Commission Act and is the sole regulatory agency for the capital market in Malaysia. The Commission is charged by the Act with the duty of supervising and monitoring the activities of market institutions (for example, Bursa Malaysia), the conduct of public listed companies, and regulating all persons licensed under the Securities Industry Act 1983 (see s. 15(1) of the Securities Commission Act ). The Commission is empowered by statutes to enforce both the Act and the Securities Industry Act.

[6] One of the functions of the Commission is to maintain investors' confidence in the securities market by providing adequate protection to such investors. In carrying out this function, the Commission may enquire into corporate deals that are open to question in order to preserve the integrity of the Malaysian capital market and to maintain investors' confidence.

[7] The Commission is thus entrusted by Parliament to protect investors, particularly, individual members of the investing public, who purchase shares of public companies whose shares are traded on Bursa Malaysia.

[8]Section 33A(1) of the Act confers on the Minister of Finance the power to prescribe a code with regard to take-overs, mergers and compulsory acquisitions. Accordingly, the Minister of Finance prescribed the Malaysian Code on Take-overs and Mergers 1998 ('Code') that came into force on 1 January 1999. The Code contains principles and rules governing the conduct of all persons involved in a take-over offer, merger or compulsory acquisition of a public listed company (see s. 33A(3) of the Act ). The Commission is charged with the responsibility of administering the Code (see s. 33A(4) of the Act ). Section 33A(5) of th