Court declares in favour of Securities Commission Malaysia in Axis insider trading case

Securities Commission Malaysia (SC) informed that it has obtained from the High Court a judgment against three defendants for insider trading involving the shares of Axis Incorporation Bhd (Axis).

Koh Tee Jin, a former director of Axis, 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. Koh Thiam Seong and Koh Hui Sim were declared to have breached section 188(2)(a) of the CMSA by disposing a total of 244,000 and 739,800 of Axis shares respectively between 9 July 2008 and 30 July 2008 while in possession of material non-public information.

SC claimed that the material information referred to in the action is related to unresolved issues in relation to Axis’ financial statements for financial year ended 31 March 2008. This resulted in Axis not being able to submit its audited financial statement for the financial year ended 31 March 2008. The announcement relating to the material information was made on 30 July 2008.

Following the judgment in default of appearance, Koh Tee Jin was ordered by the court to pay SC a total sum of three times the loss avoided by Koh Thiam Seong and Koh Hui Sim amounting to RM3,546,477. Koh Thiam Seong and Koh Hui Sim were ordered to pay SC RM739,389 and RM2,807,088 respectively, which was three times the loss each of them had avoided from the difference in price of Axis shares disposed against the likely price had the material non-public information had been generally available.

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

Read Also: