KUALA LUMPUR (Nov 27): The Court of Appeal has upheld the High Court's insider trading conviction against former Patimas Computers Bhd deputy chairman Datuk Raymond Yap Wee Hin.
In a statement, the Securities Commission Malaysia said the High Court's decision in 2022 was unanimously affirmed by the three-member bench of the COA comprising judges Datuk Ravinthran Paramaguru, Lim Chong Fong and Datuk Collin Lawrence Sequerah.
In upholding the High Court's decision, they dismissed Yap's appeal and ordered him to pay RM3.28 million in disgorgement to the SC.
This is equal to three times the losses avoided by Yap as a result of insider trading, the SC said.
The COA also ruled that the SC has the jurisdiction to claim up to RM1 million in civil penalty for the contravention, as provided for under the Capital Markets and Services Act 2007, and ordered Yap to pay the maximum amount.
He has also been barred from being a director of any listed company for five years, starting from the date of the High Court judgement on April 7, 2022.
According to the SC, Yap committed the offence when he sold 43.8 million Patimas shares, held by former managing director of Patimas Law Siew Ngoh, between June and July 2012, when he was in possession of non-public material information about audit queries and issues in relation to suspicious transactions between Patimas and its top debtors.
The matter had been raised and discussed by Ernst & Young Malaysia, Patimas’ external auditor, during a meeting with the company’s management, the SC said.
Subsequently, Patimas' board of directors announced on July 31, 2012 that the company would not be able to issue its annual audited financial statements for the Jan 1, 2011-March 31, 2012 period due to unresolved significant audit findings/queries.
"The SC views insider trading as a serious breach as it undermines the integrity of the capital market and subsequently erodes investors’ confidence in the stock market. The SC hopes that the decision of the Court of Appeal today sends a clear message that such breaches will not be tolerated by the SC as well as the courts," the SC added.