Back
2025 MarsdenLR 5128
HIGH COURT MALAYA KUALA LUMPUR
SURUHANJAYA SEKURITI MALAYSIA – Appellant
Versus
DATO AMINUDDIN MD DESA – Respondent
[Civil Suit No: WA-22NCC-573-12-2021]
Insider trading constitutes a severe breach of securities law, warranting significant penalties, especially when circumstantial evidence establishes culpability and the accused elects to remain silent.
Headnote:(A) Capital Markets and Services Act 2007 - Section 188 - Insider trading prohibitions - Defendant violated s 188(2)(a) by acquiring shares while in possession of undisclosed inside information relating to Proposed Selective Capital Reduction (SCR) - If the information was generally available, it would materially affect the share price - Defendant failed to provide evidence in his defense, leading to an adverse inference against him - As a corporate insider, severe penalties are warranted for misconduct. (Paras 1-206)
Facts of the case:
Plaintiff, the Securities Commission Malaysia, alleged Defendant contravened insider trading laws by jointly acquiring PCB shares with another individual while in possession of material inside information about an impending SCR. The Defendant did not testify and submitted a 'no case to answer.'
Findings of Court:
Defendant jointly acquired shares in violation of insider trading regulations and utilized an Overdraft Facility for funding that was connected to the acquisition. Penalties included three times the profit gained from the illegal activities and a civil penalty of RM1,000,000.00.
Issues: The court considered if the Defendant was an insider, if he breached insider trading provisions, the impact of the regulatory settlement with the accomplice, and the applicability of the Doctrine of Laches.
Ratio Decidendi: Court emphasized that circumstantial evidence suffices in proving insider trading. The Defendant's failure to testify was pivotal in affirming his liability, as was the nature of his relationships and the arrangement with the accomplice. Violation of insider trading laws merits serious repercussions to protect market integrity.
Result: Plaintiff's claims were upheld; Defendant ordered to pay RM2,466,229.20 and barred from public company positions for five years.
| Table of Content |
|---|
| 1. civil action initiated for insider trading. (Para 1 , 2 , 3 , 4) |
| 2. overview of the key persons involved. (Para 5 , 6 , 7 , 8 , 9) |
| 3. details surrounding the establishment of insider information. (Para 30 , 31 , 32 , 33) |
| 4. chronology of events leading to corporate restructuring. (Para 34 , 35 , 36 , 37) |
| 5. plaintiff's argument regarding defendant's insider trading. (Para 50 , 51 , 52 , 53) |
| 6. defendant's arguments against insider trading allegations. (Para 56 , 57 , 58 , 59) |
| 7. legal standards and elements required for proving liability. (Para 64 , 65 , 66 , 67 , 68 , 69) |
| 8. court's finding regarding possession of insider information. (Para 78 , 79 , 80 , 81 , 82) |
| 9. evidence of insider trading established. (Para 86 , 89 , 90 , 92 , 93 , 94) |
| 10. court's final decision and remedies granted. (Para 180 , 181 , 182 , 183) |
[1] This was a civil action brought by the Plaintiff, Securities Commission Malaysia, against the Defendant, Dato' Aminuddin bin Md Desa, for contravening the insider trading prohibitions under the Capital Markets and Services Act 2007 ("CMSA").
[2] The Plaintiff's claim is that the Defendant had, whilst in possession of inside information, jointly acquired shares in Perak Corporation Berhad ("PCB") with one Dato' Jamal bin Mohd Aris ("Jamal"), in contravention of s 188(2)(a) of the CMSA. Alternatively, the Plaintiff claimed that the Defendant had procured Jamal to acquire the said shares in contravention of s 188(2)(b) of the CMSA.
[3] The Plaintiff sought, inter alia, a declaration that the Defendant has contravened either s 188(2)(a) or s 188(2)(b) of the CMSA, three times disgorgement in the sum of RM2,466,229.20, a civil penalty of RM1,000,000.00 and other consequential orders.
[4] At the conclusion of the Plaintiff's case, the Defendant elected not to give evidence and submitted a "no case to answer". Hence, the Defendant presented no countervailing evidence to rebut the Plaintiff's case.
[5] The trial took 3 days, and a total of 7 witnesses testified for the Plaintiff. The details of these witnesses are as follows:
(i) Hashimawati Hamzah (PW1) — Credit Manager of Affin Bank Berhad;
(ii) Ridzal Mohd Miswan (PW2) — Team Lead, Account Maintenance, Group Wholesale Banking of RHB Investment Bank Berhad ("RIB");
(iii) Yeoh Yong Cheng (PW3) — Team Lead, Margin Financing Evaluation & Monitoring of RIB;
(iv) Lee Wei Seong (PW4) — Team Lead, Equities Trade Support and Settlement of RIB;
(v) Ng Kem Yoke (PW5) — Team Lead of Remittance Unit & Security Operations of RIB;
(vi) Sayed Sharifuddin bin Sayed Shamsuddin (PW6) — Former General Manager of Government Relations and Corporate Affairs of Perak Corporation Berhad ("PKNP");
(vii) Danny Shamizi Teh bin Ismawi (PW7) — Investigating Officer at the Securities Commission.
[6] After careful consideration of the evidence before me and the written and oral submissions of both parties, I found in favour of the Plaintiff. I set forth the reasons for my decision.
[A] Salient Background Facts
[7] The facts of this case are largely undisputed. I shall begin by setting out the chronology of events leading to this action.
Perak Corporation Berhad ("PKNP")
[8] PCB was founded in 1991. On 13 November 2003, PCB was listed on the Second Board of Bursa Malaysia and subsequently, on 5 December 2003, PCB's listing status was transferred to the Main Board of Bursa Malaysia.
[9] At the material time, PCB's core business was township development of real property and ancillary services, maritime services and sales of port-related land.
[10] Between 1 January 2013 and 31 December 2014, Perbadanan Kemajuan Negeri Perak ("PKNP") was the ultimate holding corporation of PCB and the single largest shareholder in PCB, holding approximately 52.9% of the issued and paid-up share capital in PCB. This shareholding comprised PKNP's own shareholding of 52.27% and a further 0.63% held through its three wholly- owned subsidiaries, namely Fast Continent Sdn Bhd, Cherry Blossom Sdn Bhd
