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PETALING JAYA: The High Court has ruled in favour of the Securities Commission Malaysia (SC) in an insider trading civil suit filed against Lim Kok Boon and Cheah Mean Har.
In a statement, the SC said Lim was the chief executive officer and non-independent executive director of GW Plastics Holdings Bhd at the material time.
“High Court Judge Adlin Abdul Majid ordered Lim, 66, and Cheah, 47, to each pay the SC RM142,500 disgorgement, which is three times the profits gained by Cheah as a result of the insider trading breach.
“Lim and Cheah were also required to pay a civil penalty of RM1mil and RM500,000 respectively.”
Additionally, the court ordered Lim and Cheah to pay costs of RM200,000 and RM30,000 respectively to the SC.
“Lim is also barred from being appointed as a director of a public listed company for a period of five years beginning from the date of the court judgement on April 22, 2024,” said the SC.
The High Court found that Lim had breached section 188(3)(a) of the Capital Markets and Services Act 2007 (CMSA) when he communicated material non-public information to Cheah.
Cheah subsequently acquired GW Plastics shares on Sept 25 and Sept 27 2012 and was found liable by the High Court for a breach under section 188(2)(a) of the CMSA.
The material information was in relation to a proposed share sale agreement between GW Plastics and Scientex Packaging Film Sdn Bhd and a proposed distribution of the cash proceeds arising from the share sale agreement to the shareholders of GW Plastics.
The information was announced by GW Plastics to Bursa Malaysia on Oct 3, 2012.
“This decision serves as a strong deterrent against insider trading, signifying the SC’s resolve to uphold market integrity.
“The joint accountability of the corporate insider and the trader underscores the SC’s commitment to address market misconduct and abuses that can affect the integrity of the capital market.”
Both Lim and Cheah filed an appeal against the High Court judgement today.
