SC sues lawyer for insider trading
PETALING JAYA: Securities Commission Malaysia (SC) has filed a civil suit at the Kuala Lumpur High Court against Datuk Sreesanthan Eliathamby for insider trading involving the shares of Worldwide Holdings Bhd.
The regulator said in a statement that Sreesanthan had breached Section 89E(2)(a) of the Securities Industry Act 1983 (SIA), whereby he acquired a total of 600,000 of Worldwide shares between June 7, 2006 and Sept 15, 2006, while in possession of material nonpublic information.
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.
The SC contended that the material information referred to in the action was related to the privatisation of Worldwide by way of a member’s scheme of arrangement under Section 176 of the Companies Act 1965 undertaken by Perbadanan Kemajuan Negeri Selangor (state development agency). The privatisation exercise was announced on Aug 23, 2006.
The SC is seeking, among others, a disgorgement of RM1.99 million, which is three times the profits alleged to have been made by the defendant as a result of the breach, a civil penalty of RM1 million and an order to bar the defendant from being appointed a director in any publiclisted company for 10 years.
Worth noting is that SC had also in 2012 charged Sreesanthan with seven counts of insider trading in the shares of four different stocks, namely Sime Darby Bhd, Maxis Communications Bhd, UEM World Bhd and VADS Bhd.