Axis shares insider trading case – court rules in favour of SC

PETALING JAYA: The High Court has declared a judgment in favour of the Securities Commission Malaysia (SC) in an insider trading case involving the shares of Axis Incorporation Bhd.

The SC said in a statement yesterday that former Axis director Koh Tee Jin was declared to have breached Section 188 (3)(a) of the Capital Markets and Services Act 2007 (CMSA) when he communicated inside information to his father Koh Thiam Seong and sister Koh Hui Sim.

Thiam Seong and Hui Sim was found to have breached Section 188 (2)(a) of the CMSA by disposing of a total of 244,000 and 739,800 of Axis shares respectively between July 9, 2008 and July 30, 2008 while in possession of material non-public information.

The SC said the material information referred to in the action is related to unresolved issues in Axis’ financial statements for the financial year ended March 31, 2008, which made it unable to submit its audited financial statement for the financial year ended Dec 31, 2008. An announcement relating to the material information was made only on July 30, 2008.

Following the judgment in default of appearance, Tee Jin was ordered by the court to pay the SC a total sum of three times the loss avoided by Thiam Seong and Hui Sim, amounting to RM3.5 million.

Thiam Seong and Hui Sim were ordered to pay the SC RM739,389 and RM2.8 million respectively, which is three times the loss each of them avoided from the difference in price of Axis shares disposed of against the likely price had the material non-public information been generally available.

All three defendants were also ordered to pay the SC a civil penalty of RM1 million each, with costs and interest. They are also barred for five years from being a director of any listed company.