KUALA LUMPUR: The Court of Appeal has unanimously allowed the Securities Commission's (SC) appeal and overturned a 2021 High Court decision that had acquitted former executive deputy chairman of Malaysian Merchant Marine Bhd (MMM) Datuk Ramesh Rajaratnam for insider trading.
Judges Datuk Vazeer Alam Mydin Meera, Datuk Ahmad Zaidi Ibrahim and Datuk Wong Kian Kheong found that the High Court had erred in acquitting Rajaratnam without considering the merits of the case.
In delivering the Court of Appeal's broad grounds, Wong held that the appellate court has a judicial duty, after trial and on appeal, to consider the merits of the appeal.
"This means the appellate court has to sieve through the appeal records, consider the written submissions, and listen to the oral submissions before making a just decision on the appeal," SC said in a statement today.
The Court of Appeal accordingly set aside the High Court's decision in acquitting Rajaratnam on the first charge and reinstated the earlier conviction and sentence imposed by the Sessions Court.
The SC said the Court of Appeal further directed that the case be remitted to the High Court and to be heard on the merits before another High Court judge.
The Court of Appeal also maintained the same bail conditions as was earlier imposed on Rajaratnam by the Sessions Court, namely a bail sum of RM200,000 with one surety and the surrender of his passport to the court.
He was charged at the Kuala Lumpur Sessions Court on April 29 2015 with three counts of insider trading under s.188(2)(a) of the Capital Markets and Services Act 2007 (CMSA).
In the first charge, he was alleged to have disposed 5,000,000 MMM shares on Jan 11 2010, while in possession of material inside information relating to the proposed downgrade by Malaysian Rating Corp Bhd of its credit rating on MMM's RM120 million Al-Bai' Bithaman Ajil Islamic debt securities from A-ID to BB.
In the second and third charges, he was alleged to have disposed of a total of 5,200,800 MMM shares on Feb 19 and Feb 22 2010, while in possession of material inside information relating to the classification of MMM as a PN17 company.
On Sept11 2019, after a full trial, the Sessions Court convicted him on all three charges.
He was sentenced to five years imprisonment and a fine of RM3 million (in default three years imprisonment) for each charge.
The imprisonment terms were ordered to run concurrently.
He subsequently filed an appeal against his conviction and sentence to the High Court.
On May 20 2021, the High Court allowed his appeal and set aside the conviction and sentence on all three charges.
During the SC's appeal at the Court of Appeal, the SC with the public prosecutor's consent decided not to pursue the appeal in respect of the second and third charges.
Insider trading carries a punishment of an imprisonment term not exceeding 10 years and a fine of not less than RM1 million.