PUTRAJAYA (Oct 11): Lawyer Datuk Dr Gurdial Singh Nijar argued at the Federal Court on Friday that the Securities Commission Malaysia (SC) needs to seek authorisation from the attorney general before it can initiate civil action against a person.
Gurdial, who was addressing a three-judge bench in lawyer Datuk Sreesanthan Eliathamby’s appeal against a civil penalty of RM1 million imposed on him for insider trading of Worldwide Holdings Bhd shares in 2006, said that the AG’s authority to institute proceedings are a constitutional function.
“AG’s authority to institute proceedings is a fundamental constitutional function. As the guardian of public interest, the AG exercises his discretion to consider societal implications, legislative intent and public policy to ensure that justice is dispensed in alignment with the public good and the rule of law,” he said.
He said that Article 145(3) of the Federal Constitution gives the AG/public prosecutor (PP) the discretion to institute proceedings and to determine whether the offence is a greater or lesser offence.
“Everything must emanate from the AG/PP who, by virtue of Article 145(3) of the Federal Constitution, is the repository of enforcement action in the public interest. He can delegate the institution or conduct of the enforcement proceedings — but he must personally authorise the delegation,” he said.
Gurdial further added that the AG should not be left out of the equation when the SC is left with the power to institute parallel proceedings to enforce the same offence.
“The requirement of consent by the AG must necessarily be required for civil proceedings instituted in the public interest to enforce an offence,” he said.
Sreesanthan had been ordered by the High Court to pay the SC RM1.99 million, which is three times the profits gained as a result of the insider trading, along with a civil penalty of RM1 million, and he is barred from being a director of any listed company for 10 years from Nov 18, 2020.
The SC had taken Sreesanthan to court without the AG or PP's authoristion.
The High Court decision was affirmed by the Court of Appeal on Sept 6, 2022, resulting in this appeal.
Submitting before judges Datuk Seri Hasnah Hashim, Datuk Abdul Karim Abdul Jalil and Datuk Vazeer Alam Mydin Meera, Gurdial said the Court of Appeal had erred in its decision to uphold the High Court’s decision that Sreesanthan had to pay the aforementioned sums.
He said that the Court of Appeal had failed to address the constitutional issues of Section 145(3) of the Constitution.
After Gurdial submitted before the court, his co-counsel Gopal Sreenevasan submitted to the bench but could not finish in time. Gopal will continue his submissions at a later date, and the SC represented by SM Shanmugam will reply after that.
Hasnah said the next hearing date will be set at a case management at a later date.
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.