Introduction

On 11 April 1998 Chua Seng Huat ("Chua"), the accused in the court below, was acquitted of two principal charges under s 90 and of two alternative charges under s 89 of the Securities Industry Act 1983 ("the Act"), without his defence being called. The Public Prosecutor appeals against the acquittal. The charges concern two sales of shares of Kim Hin Industries Berhad ("KHI"), a Kuala Lumpur Stock Exchange listed company. One sale was of 1,000,000 shares on 23 May 1995 and the other of 200,000 shares on 26 June 1995 and the shares belonged to Kim Hin Malaysia Sdn Bhd ("KHM"). It is alleged that at the respective time of the two sales Chua had information of "the decline in operating profits of the Kim Hin Group of companies" of which he is the managing director. Chua is also the managing director of KHM.

Since the lower court is of the view that a case beyond all reasonable doubt had not been made out at the close of the case for the prosecution, it is necessary to set out the facts of the case relevant for considering whether the ingredients of the offences had been established. Before turning to that question I will first decide whether Chua, as managing director, can be considered as acting in an "official capacity" within the meaning of s 90 when he sold those shares and that turns upon the meaning to be ascribed to the phrase "official capacity".

What is "official capacity"

The defence contended, and the lower court agreed, that s 90 covers only persons who are or were government or public service officers and not managing or other directors of public listed companies. This is the convenient place to reproduce both s 89 and s 90 for the purposes of construing the meaning of the term "official capacity", viz. -

Dealings by officers in securities

89. (1) An officer, agent or employee of a corporation or officer of a stock exchange who is or in relation to a dealing in securities of the corporation by himself or any other person makes improper use to gain, directly or indirectly, an advantage for himself or any other person of specific confidential information acquired by virtue of his position as such officer, agent or employee or officer of the stock exchange which if generally known might reasonably be expected to affect materially the price of the subject matter of the dealing on a stock exchange shall, in addition to any penalty imposed under section 91, be liable to a person for loss suffered by the person by reason of the payment by him or to him of a consideration in respect of the securities greater or lesser, as the case may be, than the consideration that would have been reasonable if the information had been generally known at the time of the dealing.

(2) An officer, agent or employee of a corporation or officer of a stock exchange shall not be liable under subsection (1) to a person for any loss suffered by that person if that person knew or ought reasonably to have known of the information referred to in subsection (1) before entering into the transaction relating to the dealing in securities of the corporation.

(3) An action for the recovery of the amount of a loss referred to in subsection (1) shall not be commenced after the expiration of two years after the date of the completion of the dealing in securities in respect of which the loss was suffered.

1.

2. In this section -

"agent" includes a banker, advocate and solicitor, auditor, accountant or stock broker of the corporation and any person who is or at any time in the preceding six months has been knowingly connected with the body corporate and has information which -

a.

b. he holds by virtue of being connected with the corporation;

c.

d. it would be reasonable to expect a person so connected and in the position by virtue he is so connected not to disclose except for the proper performance of the functions attaching to that position; and

e.

f. he knows is unpublished price-sensitive information in relation to the securi