Supermax CEO charged with insider trading, shares fall 16.5%
Tuesday, 16 December 2014
By: QISHIN TARIQ, NG BEI SHAN
Thai (centre) arriving at the KL Sessions Court
KUALA LUMPUR: Supermax Corp Bhd CEO Datuk Seri Stanley Thai was charged at the Sessions Court here with insider trading related to Supermax’s former associate APL Industries Bhd (APLI).
Thai Kim Sim, 54, also known as Stanley Thai, claimed trial to communicating insider information to remisier Tiong Kiong Choon, 54, that was expected to have a material effect on the price and value of APLI.Also charged for the same offence was his wife Datin Seri Tan Bee Geok and his sister-in-law Tan Bee Hong, who now held positions in Supermax.
All three claimed trial to the charges.
Supermax shares slumped 16.5% or 32 sen yesterday to RM1.62 with 13.09 million shares traded following the news amid a weak overall market. At the close, its market cap stood at RM1.18bil.
In a statement, Supermax said it was “business as usual” for all its subsidiaries and overseas distribution centres.
It said the charges against Thai and his wife were strictly related to transactions in APLI shares which allegedly occurred in 2007.
It added the two had fully cooperated with the Securities Commision throughout the investigations related to APLI shares.
Currently, the glove maker owns nine factories and exports to more than 155 countries.
Supermax had invested RM27.8mil to buy 14% in APLI between 2005 and 2009 for business expansion purposes.
Later on, Supermax made a provision of RM16.7mil for the write-off of the investment in APLI after a few failed attempts to revive the latter.
In early December 2008, Thai resigned as APLI’s managing director and chairman.
According to the charge sheet, the information was an audit adjustment proposed by APLI’s auditor, which would result in the company reporting a higher loss for the financial year ended June 30, 2007 as compared with the previously unaudited fourth quarter results for the same financial year.
The charge also stated that Thai, who was APLI’s CEO then, had leaked info on how APLI would be classified as an affected issuer pursuant to the Listing Requirements of Bursa Malaysia Securities Bhd and Practice Note 17/2005.
The information was alleged to have led Tiong to dispose of the securities of APLI on the stock market. Thai is alleged to have committed the offence between Oct 26 and 29, 2007.
The alleged offence under Section 188(3)(a) of the Capital Markets and Services Act 2007 is punishable by a maximum 10 years prison sentence and a fine of not less than RM1mil.
APLI was delisted in 2009.
APLI manufactured and distributed latex examination gloves and operated primarily in Malaysia, North America, Europe and Asia.
Prosecuting officer from the Securities Commission, T. Chelvakumar urged the court to set bail at RM500,000 and order Thai to surrender his passport.
Counsel Datuk K. Kumaraendran pleaded for lower bail, and for his client to keep his passport as Thai needed to travel to New York next week.
Judge Abdul Rashid Daud allowed bail at RM250,000 with one surety, and ordered Thai to surrender his passport on Feb 3, 2015.
The court fixed Jan 15 for mention.
Supermax executive chairman, wife charged with insider trading (Update)
Monday, 15 December 2014
KUALA LUMPUR: Supermax Corporation Bhd’s executive chairman and group managing director Datuk Seri Stanley Thai and his wife Datin Seri Cheryl Tan were charged by the Securities Commission with insider trading involving the shares of APL Industries Bhd in 2007.
Supermax, which makes gloves, issued a statement on Monday that Thai and his wife, who is an executive director of the company, were charged under Section 188 3(a) of the Capital Markets and Services Act 2007 involving APLI shares in 2007. Both claimed trial to the charges preferred against them.
The Sessions Courts in Kuala Lumpur granted them bail of RM250,000 with one surety each despite the prosecution demanding RM500,000 with two sureties after hearing from counsel for both, said the company.
“The above-mentioned charges on both Datuk Seri Stanley Thai and Datin Seri Cheryl Tan are strictly related to transactions in APLI shares which allegedly occurred in 2007. The charges against them are therefore related to facts allegedly occurring seven years ago,” it said.
Supermax also said both had fully cooperated with the SC throughout the investigations related to APLI shares.
The company stated that it was business as usual at Supermax, all its subsidiaries and overseas distribution centres. It added that the business operations were not affected and were running as usual in all Supermax offices and factories.
Last week, the SC charged a remisier Tiong Kiong Choon with insider trading offences involving APL Industries shares in 2007.
Tiong was charged with selling 6.208 million APLI shares via the accounts of his mother-in-law, Bong Nyon and his mother, Ling Moy Yang on Oct 26, 2007 and Oct 29, 2007.
The SC said he had non-public information involving the audit adjustments proposed by APLI’s auditors. The adjustments would result in APLI reporting a higher loss of RM21.1mil in FY ended June 30, 2007 as compared to the unaudited results of RM4.5mil for the same period.
The effect of the adjustments would result in APLI being designated as a PN 17 company.
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