KUALA LUMPUR (Aug 14): Former Malaysian Merchant Marine Bhd (MMM) executive deputy chairman Datuk Ramesh Rajaratnam has been granted a postponement of his criminal appeal at the High Court here for insider trading, pending the results of an appeal in a separate, unrelated matter at the Federal Court, which could have bearing on his case.

High Court judge K Muniandy gave his decision on Wednesday, to allow the postponement of Ramesh’s appeal, pending a Federal Court appeal in another case of the same nature.

However, the judge dismissed an application for a stay of Ramesh’s appeal. Ramesh’s lawyers then sought a postponement of their appeal here, pending a decision on lawyer Datuk Sreesanthan Eliathamby’s appeal at the Federal Court, as they claim that the decision in that case would have a bearing on Ramesh’s trial.

Muniandy allowed for the postponement until Sreesanthan’s appeal is disposed of.

A stay of proceedings is a ruling by the court to stop or suspend a proceeding or trial either temporarily or indefinitely. However, a postponement of proceedings, as it is in this case, is not an indefinite delay.

Hashley Tajudin, a deputy public prosecutor for the Securities Commission Malaysia (SC), confirmed the matter with The Edge, clarifying that it was a postponement that was granted, and not a stay as was initially reported.

Sreesanthan is appealing against a civil penalty of RM1 million imposed on him for insider trading of Worldwide Holdings Bhd shares in 2006.

In April the Federal Court bench, led by Chief Justice Tun Tengku Maimun Tuan Mat, granted leave for the appeal, for specific questions of law to be determined by the apex court.

Sreesanthan had been ordered by the High Court to pay the Securities Commission RM1.99 million, which is three times the profits gained as a result of insider trading, along with the civil penalty of RM1 million, and was barred from being a director of any listed company for 10 years starting from Nov 18, 2020.

The High Court decision was affirmed by the Court of Appeal on Sept 5, 2022, resulting in this appeal.

Sreesanthan acquired a total of 600,000 Worldwide shares between June 7 and July 11, 2006, while in possession of material non-public information relating to the proposed privatisation of Worldwide by Perbadanan Kemajuan Negeri Selangor.

At the material time, Sreesanthan was a senior partner in a law firm which was engaged to act as the legal adviser of the proposed privatisation of Worldwide.

Ramesh was first charged with three counts of insider trading at the Kuala Lumpur Sessions Court in April 2015. He was later sentenced to five years’ jail and fined RM3 million (in default of three years’ imprisonment) for each charge.

Under the first charge, he allegedly sold five million MMM shares in January 2010, while possessing inside information regarding the proposed downgrade by Malaysian Rating Corp Bhd of its credit rating on MMM’s RM120 million Al-Bai’ Bithaman Ajil Islamic Debt Securities from A-ID to BB+ID.

Under the second and third charges, Ramesh is accused of selling 5.2 million MMM shares in February 2010, while possessing inside information regarding the classification of MMM as a Practice Note 17 company.

On May 6, the COA reversed the ruling made by the High Court in May 2021, which had granted Ramesh’s appeal, and nullified the conviction and sentence imposed by the Sessions Court on all three charges of insider trading against him.

COA judges Datuk Vazeer Alam Mydin Meera, Datuk Ahmad Zaidi Ibrahim and Datuk Wong Kian Kheong ruled that the High Court had erred in acquitting Ramesh without considering the case’s merits.

The COA, in setting aside the High Court’s decision in acquitting Ramesh on the first charge, also reinstated the earlier conviction and sentence imposed by the Sessions Court.

The court then directed that the case be remitted back to the High Court to hear the appeal before another judge. However, the SC, with the consent of the public prosecutor, decided not to pursue the appeal in respect of the second and third charges.

The SC is pursuing the first charge.

*Corrigendum: This story has been updated for accuracy. It was initially reported that Ramesh had been granted a stay.

Read also:
Former Malaysian Merchant Marine deputy chair seeks to stay his insider trading trial
Appellate court reverses acquittal of ex-MMM deputy chairman for insider trading
Former MMM deputy executive chairman acquitted of insider trading
Ex-MMM executive deputy chairman Ramesh jailed, fined for insider trading