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Court to deliberate on constitutionality of Securities Industry Act

Thursday, 20 October 2011 09:13am

©The Sun Daily (Used by permission)
by TAN YI LIANG

KUALA LUMPUR: The High Court will on Nov 14 decide on the constitutionality of Section 122 (1) of the Securities Industry Act 1983 in an application by former Transmile Group officials accused of misleading the Securities Commission.

Judge Datuk Su Geok Yiam set the date yesterday after hearing submissions from counsel for both parties.Tan Hock Chuan, representing the applicants, submitted that section 122(1) of the Act was unconstitutional in that it infringed the presumption of innocence in Article 5 (1) of the Federal Constitution.

Section 122 (1) holds that any person who was a director, chief executive officer, officer or representative of a body corporate or purporting to act in such a capacity is deemed to have committed an offence by a company.

Under the law, this presumption is rebutted if it can be proved that the offence was committed without the consent or connivance of the accused, and that the accused exercised all diligence to prevent the offence.

He also argued that the same section also infringed the provisions in Article 8(1) of the Federal Constitution guaranteeing equal protection before the law in that it discriminated against directors.

Former Transmile chief executive officer Gan Boon Aun, former chief financial officer Lo Chok Ping and former executive director Khiudin Mohamed were charged in July 2007 with abetting the company in making a misleading statement in its quarterly report. They allegedly committed the offence at Bursa Malaysia Securities Bhd between Feb 28, 2006 and Feb 15, 2007.

The alleged misleading statement was likely to induce the purchase of securities of Transmile Group by other people.

The charge under section 86(b), read together with section 122C(c) of the Securities Industry Act 1983, carries a minimum fine of RM1 million or imprisonment up to 10 years, or both, on conviction.

In submissions, SC counsel Shanti Geoffrey said the three were well within the provisions of the Act as they were directors of the company.

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