The Kuala Lumpur Sessions Court has convicted former CEO of APL Industries Bhd (APLI) Datuk Seri Stanley Thai Kim Sim and former remisier Tiong Kiong Choon for insider trading offences. Thai, who is currently Supermax Corp Bhd CEO, was sentenced to a five-year jail term and a RM5 million fine, while Tiong was sentenced to five years jail and a RM10 million fine.
Insider trading offences, under section 188 of the Capital Markets and Services Act 2007 (CMSA), carry a mandatory punishment of imprisonment not exceeding 10 years and a fine of not less than RM1 million. This is the first insider trading conviction where both the tipper (the person who communicated the inside information) and the tippee were charged and convicted for the offence.
Thai was convicted for communicating non-public information between Oct 26, 2007 and Oct 29, 2007 to Tiong. Tiong was convicted for two counts of disposing a total of 6.2 million APLI shares while in possession of the same non-public information via accounts belonging to his mother-in-law and his mother. At the time of the commission of the offence, Tiong was also a licensed intra-day trader with a stock broking company.
The non-public information communicated from Thai to Tiong related to the audit adjustments proposed by APLI’s auditors which resulted in APLI reporting a higher loss for the financial year ended June 30, 2007, as compared to the previously reported unaudited Q4 results for the same financial year, and that APLI would be classified as a PN 17 company.
APLI made announcements to Bursa Malaysia Securities Bhd about the audit adjustments and its classification as a PN 17 company on Oct 31, 2007. APLI was delisted in 2009.
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