Patimas Computers Ex-Deputy Chairman Fails To Overturn High Court Judgment
The Court of Appeal has made a decision today that upholds the High Court’s ruling in favor of the Securities Commission Malaysia (SC) regarding a case of insider trading involving a former deputy chairman of Patimas Computers Berhad.
Back in 2022, Dato’ Raymond Yap Wee Hin was found liable for insider trading under certain sections of the Capital Markets and Services Act 2007 (CMSA) by the High Court. The Court of Appeal, comprising Justices Datuk Ravinthran a/l N. Paramaguru, Dato’ Lim Chong Fong, and Dato’ Collin Lawrence Sequerah, has now unanimously dismissed Yap’s appeal and maintained the High Court’s decision. Yap has been ordered to pay RM3.28 million in disgorgement to the SC, which is equivalent to three times the amount he managed to avoid losing through insider trading.
The Court of Appeal ruled that the SC has the authority, as laid out in section 201(6) of the CMSA, to bring civil proceedings against individuals for breaches of insider trading regulations under section 188(2) of the CMSA. In addition to the disgorgement amount, Yap has also been directed to pay a civil penalty of RM1 million. He will also be prohibited from holding any directorial position in a listed company for a period of five years, starting from the date of the original High Court judgment on 7 April 2022.
The insider trading violation occurred when Yap sold off 43.8 million Patimas shares that belonged to Law Siew Ngoh, a former Managing Director of Patimas, between June and July 2012. During this period, Yap was privy to confidential information concerning audit discrepancies and issues surrounding questionable transactions between Patimas and its major debtors. These concerns were raised by Ernst & Young Malaysia, Patimas’ external auditor, during a meeting with the company’s management team.
On 31 July 2012, Patimas officially informed Bursa Malaysia that it would be unable to release its Annual Audited Financial Statements for the financial period from 1 January 2011 to 31 March 2012 due to significant and unresolved audit queries and findings.
The SC considers insider trading a serious offense that undermines the trustworthiness of the capital market and can negatively impact investors’ confidence in the stock market. By affirming the High Court’s decision, the Court of Appeal hopes to convey a strong message that such misconduct will not be condoned by the SC or the legal system.
