Court backs SC bid to recover insider trading penalties from former WCT, Ara Holdings executives

KUALA LUMPUR: The High Court has allowed the Securities Commission (SC) to revive a garnishee order against former WCT Holdings Bhd managing director Goh Chin Liong and former Ara Holdings Sdn Bhd deputy managing director Leong Ah Chai.

The order is aimed at recovering RM5.83 million linked to a 2022 insider trading case.

The High Court also ordered both defendants to each pay costs of RM5,000 to the SC.

Following the outcome today, the SC will proceed with next steps to recover the judgment sum.

“This outcome reaffirms the SC’s commitment to the robust enforcement of civil judgments as a key pillar of its regulatory mandate.

“The SC will continue to pursue all available enforcement measures to ensure full payment of judgment sums obtained in civil enforcement actions,” it said in a statement.

Following a full trial in 2022, the High Court held Goh and Leong liable for insider trading under sections 188(3) and 188(2) of the Capital Markets and Services Act 2007 (CMSA).

The SC said that contravention was in relation to the communication of material non-public information and trading in WCT Bhd shares while in possession of the said information.

The information was regarding the cancellation of a contract for the proposed construction of the Nad Al Sheba Dubai Racecourse in Dubai, which was awarded to a joint-venture company set up by WCT and one Arabtec Construction LLC.

The then High Court judge Datuk Ahmad Zaidi Ibrahim ordered each of them to pay RM2.54 million as disgorgement of losses avoided, civil penalty of RM300,000 and costs of RM75,000 to the SC.

Both defendants appealed against the decision to the Appeal Court and applied for a stay of execution of the sum pending the appeals.

Their applications were dismissed by the High Court on Oct 23, 2023, and subsequently by the Appeal Court on May 14, 2024.

Despite the dismissal of the stay applications by both courts, the defendants both failed to comply with the SC’s demand for payment of the sum.

© New Straits Times Press (M) Bhd

المصدر: New Straits Times