KUALA LUMPUR: Lim Kok Boon, a former chief executive officer of GW Plastics Holdings Bhd, and a friend have been ordered to pay a total of RM2.01 million.
The High Court on Monday ruled in favour of the Securities Commission (SC) in an insider trading civil suit filed against Lim and Cheah Mean Har.
Lim was the CEO and non-independent executive director of GW Plastics 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 RM1 million and RM500,000 respectively the SC said in a statement.
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 five years beginning from the date of the court judgment on April 22 this year.
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 2017 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 commission said.
It added that 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 had filed an appeal against the High Court judgment on Monday.