KUALA LUMPUR, April 22 — The Securities Commission Malaysia (SC) has won an insider trading civil suit against former GW Plastics Holdings Bhd chief executive officer Lim Kok Boon and his friend Cheah Mean Har, who were ordered to pay the SC a total of RM2.015 million.
The SC said the High Court, which today ruled in favour of the SC, has ordered Lim, 66, who was also the non-independent executive director of the company at the material time, and Cheah, 47, each to pay the SC, RM142,500 disgorgement, which is three times the profits gained by Cheah as a result of the insider trading breach.
“Lim and Cheah were also required to pay a civil penalty of RM1 million and RM500,000 respectively. Additionally, the court ordered Lim and Cheah to pay costs of RM200,000 and RM30,000 respectively to the SC.
“Lim is also barred from being appointed as a director of a public listed company for a period of five years beginning from the date of the court judgment on April 22, 2024. The High Court found that Lim had breached Section 188(3)(a) of the Capital Markets and Services Act 2007 (CMSA) when he communicated material non-public information to Cheah,” SC said in a statement tonight.
According to the SC, Cheah subsequently acquired GW Plastics shares on September 25 and September 27 in 2012, and was found liable by the High Court for a breach under section 188(2)(a) of the CMSA.
The material information was in relation to a proposed share sale agreement between GW Plastics and Scientex Packaging Film Sdn Bhd and a proposed distribution of the cash proceeds arising from the share sale agreement to the shareholders of GW Plastics.
The information was announced by GW Plastics to Bursa Malaysia on October 3, 2012.
“This decision serves as a strong deterrent against insider trading, signifying the SC’s resolve to uphold market integrity. The joint accountability of the corporate insider and the trader underscores the SC’s commitment to address market misconduct and abuses that can affect the integrity of the capital market,” said the SC.
Both Lim and Cheah have filed an appeal against the High Court judgment today. — Bernama
