Businessman to pay RM2.7 million penalty for insider trading

 

The businessman bought shares in a company while having non-public information about its proposed acquisition, the Securities Commission said.

PETALING JAYA: The managing director of a plastics company has been ordered to pay a penalty of RM2.7 million to the Securities Commission (SC) as a result of insider trading.

The commission said the order was handed down by the High Court on Thursday, when it upheld the SC’s civil suit against Toh Kai Fatt, managing director of Ban Seng Plastic Industries & Assembly Sdn Bhd.

The SC said the High Court held that the commission had successfully proven its claim of insider trading against Toh, Bernama reported. “Justice Ong Chee Kwan ordered Toh to pay the SC RM2.36 million, the amount equal to three times the profits gained as a result of the insider trading,” the SC said in a statement.

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The commission said Toh acquired 974,000 shares of HPI Resources Bhd between March and June 2011 while in possession of material non-public information in relation to Oji Paper Co. Ltd’s proposed acquisition of the company.

“Insider trading is a major concern, and the SC will continue to monitor and take action against any suspicious conduct to protect the integrity of the capital market,” the SC added.

“The judgment sends a strong and clear message to the public that insider trading is a serious offence and that using inside information for personal gain will not be tolerated,” it said.

Toh, 52, is also required to pay a civil penalty of RM250,000 and costs of RM100,000 to the SC.

Toh was barred from being appointed as a director of a public-listed company and also restrained from trading in any securities on Bursa Malaysia for five years beginning from April 13, the date of the judgement. - FMT