Issue 2

Elaborate the Securities Industry Act 1983 sections and analyze the case.

For Transmile company case, Securities commission charge the CEO and former executives
which are Khiudin Mohd, Lo Chok Ping and Gan Boon Aun under Section 86(b), Section
122C(c) and Section 122B of the securities commission act 1983. Not only for that, Two non
executive directos of Transmile, Chin Keem Feung and Shukri Sheikh Abdul Tawab also be
charged in Section 122B(b)(bb) of the securities commission act 1983.

Section 86 “False or misleading statements, etc”

According to section 87, a person shall not making a wrong statement or any dishonest material
and likely to affect of raising, lowering, maintaining or stabilizing the market prices of securities
by sharing wrong information. According to section 86(b), it means the person already have
consent or should know about the information or statements is false or misleading in a material
particular. In this case, we can see that Transmile company revenue and profits has been
materially overstated not only in the company’s 2006 unaudited annual accounts but also in the
2004 and 2005 audited annual accounts. Khiudin Mohd, one of the member of Transmile
Company’s audit committee, he should understand and overseeing the financial report but he was
approved to release the overstated revenue figure in Bursa Malaysia. Therefore, Khiudin Mohd is
having consent to making wrong statement to make the market price of securities increase.

Section 122C “Attempts, abetments and conspiracies”

Subject to Section 122(1), a chief executive officer, an officer or a representative of the body
corporate or was purporting to act in such capacity, is deemed to have committed that offence
unless the offence was committed without his consent and that he exercised all such diligence to
prevent the commission of the offence but there are no evidence prove themselves therefore they
be charged by Security Commission. According to section 122C(c), it means a person who abets
or is engaged in a criminal conspiracy to commit any offence under this Act, whether or not the
offence is committed in consequence thereof, commits such offence and is liable to the penalty
for such offence. In simple term means any person engage or encourages other person in criminal
conspiracy, they should be pay for the penalty. So in this case, securities commission also
offered compound as penalty to Lo Chok Ping, Chin Keem Feung and Shukri Sheikh Abdul
Tawab and they also no evidence to prove them did not offence.

http://www.kehakiman.gov.my/judgment/file/W-09-258-11-
2011_YA_Dato_Tengku_Maimun.pdf

https://www.thestar.com.my/business/business-news/2015/09/19/incorrect-accounts-are-the-boards-
problem/

file:///C:/Users/Chowyang/Downloads/25093-Article%20Text-55241-1-10-20141204.pdf

https://prezi.com/0whcliqrijbm/transmile-group-berhad/

https://www.coursehero.com/file/13084281/Case-Study-Transmile/

https://www.thestar.com.my/business/business-news/2007/07/12/sc-charges-three-former-execs-at-
transmile/

https://issuance.sc.com.my/wp-content/uploads/eng/html/resources/acts/SIA_20040105.pdf