PUTRAJAYA (July 2): Datuk Ng Back Heang, former executive director of Patimas Computers Bhd, must pay the Securities Commission Malaysia (SC) RM1.24 million in disgorgement and RM700,000 in civil penalties after the Federal Court dismissed his application for leave to appeal.
A three-member Federal Court bench led by Datuk Seri Vazeer Alam Mydin Meera ruled that the legal questions on insider trading raised by Ng had already been settled in the earlier Datuk Sreesanthan Eliathamby case.
“Hence, the threshold requirement had not been met. Following this, Ng’s motion is dismissed,” Vazeer said in the unanimous decision on Thursday.
The other judges on the bench were Tan Sri Ahmad Terrirudin Mohd Salleh and Datuk Mohd Nazlan Mohd Ghazali.
The bench also ordered Ng, 72, to pay RM50,000 costs.
Ng's lawyer, Datuk Jasbeer Singh, sought leave to appeal by raising three questions of law. However, Vazeer said the issues had already been answered in the Sreesanthan ruling, in which he was also part of the bench. Jasbeer said he stood by his written submissions. Jasbeer appeared with Noor Syakirah Khalil and Nur Halimah Mohamad of Messrs Jasbeer, Nur and Lee.
In civil cases on final appeals at the Federal Court, leave (permission) has to be obtained before the bench on novel questions of law. Should leave be granted, then the merits of the appeal will be heard at another date.
Last year, the Federal Court ruled in Sreesanthan's case that insider trading under Section 89E(1) of the Securities Industry Act 1983 (now Section 188(1) of the Capital Markets and Services Act 2007) requires proof that a person knew, or ought reasonably to have known, that the information was not publicly available. The court also held that the attorney general's powers to prosecute criminal offences do not apply to civil insider trading actions brought by the SC.
In 2020, the SC filed a civil lawsuit against Ng for insider trading under Section 188(2)(a) of the Capital Markets and Services Act 2007.
The SC alleged that while he was an executive director of Patimas, Ng sold 16.5 million shares between May and July 2012 while in possession of material non-public information. This involved unresolved audit issues and suspicious transactions between Patimas and its major debtors, which had been raised by the company’s external auditor.
Later, Patimas announced on Bursa Malaysia on July 31, 2012 that it could not release its audited financial statements due to significant unresolved audit queries.
After a full trial, the High Court ruled on Nov 16, 2022 that Ng was liable for insider trading. He was ordered to pay RM2.04 million to the SC, including RM1.24 million in disgorgement, RM700,000 in civil penalty and RM100,000 in costs, and was barred from serving as a director of any listed company for five years.
The Court of Appeal later upheld this decision in September last year.
This marks the SC's second successful insider trading claim against a former Patimas director.
The SC was represented by Dinesh Bhaskaran and Serena Aizuddin along with SC deputy public prosecutor (DPP) Mohd Hafiz Mohd Yusoff and DPP Eunice Ong.