Security Commission files civil suit against Datuk Sreesanthan Eliathamby

PETALING JAYA: Securities Commission Malaysia (SCM) has filed a civil suit at the Kuala Lumpur High Court against Datuk Sreesanthan Eliathamby for insider trading involving the shares of Worldwide Holdings Bhd (Worldwide).
In the claim filed on Oct 12 2016, SC claimed that Datuk Sreesanthan had breached section 89E(2)(a) of the Securities Industry Act 1983 (SIA), where he acquired a total of 600,000 of Worldwide shares between June 7, 2006 and Sept 15, 2006, while in possession of material non-public information.
At the material time, Datuk Sreesanthan was a senior partner in a law firm which was engaged to act as the legal adviser of the proposed privatisation of Worldwide.
The SC, in a statement issued today, contended that the material information referred to in the action was related to a proposed privatisation of Worldwide by way of a member's scheme of arrangement under section 176 of the Companies Act 1965 undertaken by Perbadanan Kemajuan Negeri Selangor.
On Aug 23, 2006, Worldwide announced the proposed privatisation to Bursa Malaysia.
The SC is seeking, among others, a disgorgement of RM1,989,402, which is three times the profits alleged to have been made by the defendant as a result of the breach, a civil penalty of RM1 million and an order to bar the defendant from being appointed as director in any public-listed company for a period of 10 years.
In 2012, the SC charged Datuk Sreesanthan with seven counts of insider trading in the shares of four different stocks, namely Sime Darby Bhd, Maxis Communications Bhd, UEM World Bhd and VADS Bhd.