This article first appeared in The Edge Malaysia Weekly on February 19, 2024 - February 25, 2024
Last week, the Securities Commission Malaysia (SC) won a civil suit against Datuk Aminuddin Md Desa, former CEO of the Perak State Development Corporation (PKNP) and CEO of its publicly traded unit, Perak Corp Bhd, for insider trading violations.
Aminuddin is required to pay the SC RM2.46 million, which is three times the profits gained as a result of the insider trading breach and a penalty of RM1 million with costs of RM100,000.
The SC said Aminuddin had breached Section 188(2)(a) of the Capital Markets and Services Act 2007 (CMSA) by acquiring 1.4 million Perak Corp shares between October 2013 and January 2014, when PKNP was proposing the privatisation of Perak Corp.
Aminuddin is also barred from being appointed as a CEO or director, or being involved in the management of a public-listed company or its subsidiary for five years, and trading in any securities on Bursa Malaysia for five years.
Other than the insider trading charge, Aminuddin was also charged with bribery at the Sessions Court in Ipoh in January 2019, for allegedly accepting a bribe in the form of payment for the construction of his bungalow, amounting to RM455,660, from a contractor.
To recap, Aminuddin was appointed CEO of Perak Corp in February 2013 but he resigned in May 2018.
Perak Corp is not flush with cash, quite the opposite. Perak Corp and sister company Majuperak Holdings Bhd — both units of PKNP, which owns 52.9% and 51.41% respectively of the companies — are underperforming.
While Perak Corp has been in the Practice Note 17 category for companies in financial distress since February 2020 and has sought a number of extensions to regularise its financial condition, Majuperak, in April 2020, triggered paragraph 8.03A (2b) of the Listing Requirements, which indicates that the company has insignificant business or operations.
Serious consideration should be given to the selection of CEOs whose job is to run companies and improve shareholder value.
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