Low Thiam Hock v Pendakwa Raya (42S-3-01/2016)

The appeal herein is against the decision of the Sessions Court which had convicted the Appellant (“the Accused”) an offence of market manipulation under Section 84(1) Securities Industry Act 1983 (Act 280) (SIA). 2

The charge is related to the Accused’s instruction to a dealer’s representative of Sime Securities Sdn Bhd to purchase Repco Holdings Bhd (RHB) shares by taking up any offer prices of the said shares offered by sellers on Kuala Lumpur Stock Exchange (KLSE) during the said specific time which was calculated to create a misleading appearance with respect to the price of RHB shares on KLSE.

Upon convicted, the Accused was sentenced to imprisonment of five

years and a fine of RM5,000,000.00 (in default 5 months imprisonment). Background [4] The Accused was charged on 18th September 1999. On 14th November 2006, after the prosecution had called 25 witnesses the learned Session Judge (LSJ) found the prosecution failed to prove a prima facie case against the Accused who was then acquitted without his defence being called. [5] On appeal by the prosecution, the High Court on 28th January 2012 affirmed the decision of LSJ. [6] The matter then went to Court of Appeal which on 28th February 2013 reversed the High Court’s decision and ordered the Accused to enter his defence as per the charge. [7] The Accused elected to testify under oath and proceeded to call 7 witnesses in support of his defence. 3 [8] The LSJ on 11th January 2016 found that the Accused had failed to raise any reasonable doubt on the prosecution’s case and proceeded to find him guilty and he was duly convicted as per charge and proceeded to sentence him on 29th February 2016. The law [9] In order to succeed in its prosecution, the prosecution has to prove that the Accused instructed the dealer’s representative of Sime Securities Sdn Bhd to purchase Repco Holdings Bhd (RHB) shares which constitutes an act that is calculated to create a misleading appearance with respect to the price of RHB shares on KLSE. Refer to North and Others v Marra Developments LTD 37 ALR 341 and Donald v Australian Securities and Investment Commission [2000] 104 FCR 126; [2000] FCE 1142. The charge “Bahawa kamu pada 3 Disember 1997 antara jam pukul 11.00 pagi dan 5.00 petang di sime securities Sdn Bhd, tingkat 21, Bangunan Sime Bank, 4 Jalan Sultan Sulaiman, 50000 Kuala Lumpur, dalam Wilayah Persekutuan Kuala Lumpur, telah mengarahkan seorang wakil peniaga Sime Securities Sdn Bhd untuk membeli saham-saham Repco Holdings Bhd dengan menyerap apa-apa harga tawaran saham-saham tersebut yang ditawarkan oleh penjual-penjual di Bursa Saham Kuala Lumpur pada masa yang berkenaan, perbuatan yang dikira boleh mewujudkan suatu rupa mengelirukan berkenaan dengan harga saham Repco Holdings Bhd di Bursa Saham Kuala Lumpur dan oleh yang demikian, kamu telah melakukan suatu kesalahan di bawah seksyen 84(1) Akta 4 Perindustrian 1983 (Akta 280) dan kamu boleh dihukum di bawah seksyen 91 Akta yang sama.” Translated version “That you, on 3rd December 1997, between 11 am to 5 pm, at Sime Securities Sdn Bhd, 21st Floor, Bangunan Sime Bank, 4 Jalan Sultan Sulaiman, 50000 Kuala Lumpur in the Federal Territory of Kuala Lumpur, instructed a dealer’s representative of Sime Securities Sdn Bhd to purchase Repco Holdings Berhad shares by taking up any offer prices of the said shares offered by sellers on the Kuala Lumpur Stock Exchange during the time in question, which act was calculated to create a misleading appearance with respect the price of Repco Holdings Berhad shares on the Kuala Lumpur Stock Exchange and you have thereby committed an offence under section 84(1) of the Securities Industry Act (Act 280) punishable under section 91 of the same Act.” Prosecution case [10] A summary of the prosecution is laid down by the LSJ in his ground of judgement at para 7 – 15 which can be found at pages 121 – 125 (AR Jilid 1) and explained by the prosecution in great detail in their written submission. Refer to page 9 – 17 written submission by the prosecution dated 25th February 2022. [11] Briefly, the evidence produced by the prosecution showed that the Accused on the morning of 3rd December 1997 instructed PW16 to purchase Repco’s shares. All in all, PW16 received trade instruction from 5 the Accused in three different periods, divided into the value two RM10 million and one RM5 million. [12] This is consistent with the testimony of PW 24 who also confirmed that the timing of purchase of these shares and quantity was dictated by the timing of disbursement. [13] PW20, the prosecution expert whose opinion was accepted by the LSJ had opined that the purchase of the said shares pursuant to the instruction of the Accused had direct influence to the rise in the price of Repco’s shares on 3rd December 1997 significantly, against the downward movement of the KLSE Second Board Index (SBI). It rose significantly from RM108.50 to RM113.00. [14] This upward movement of Repco share price on 3rd December 1997 itself was clearly inconsistent with the announcement a day earlier of the rescission of the conditional Shares Sale and Purchase Agreement (SSPA) entered into between Repco as well as Everise Capital Bhd (a subsidiary of Repco and in which the Accused is also a director) and Glowblitz Amalgamated Sdn Bhd, a wholly-owned subsidiary of Rekapacific Bhd. [15] On the very next day, 4th December 1997 when the Accused stopped trading in the Repco shares, its prices plummeted before moving in downward manner, in tandem with the SBI. 6 Defence case [16] The defence’s case is explained by the LSJ in his ground of judgement at para 16 – 30, pages 125 – 133 (AR Jilid 1), and briefly as follows; the Accused admitted he was the CEO of Repco at the material time and that Repco performance was strong and financially profitable during the said period especially through the operations of its subsidiary, Everise Capital. [17] In September 1997 Repco was offered a loan in the amount of RM260 million by Sime Bank which it took.at about the same time Sime Securities was suffering huge shortfalls especially that of REFCO’s which the Accused claimed was not his account. [18] Due to this, the Accused claimed that one Shafiq Abdullah was seconded by Sime Bank to Sime Securities to resolve this issue. Shafiq, according to the Accused was personally planning to conduct a management buy-out of Sime Securities by depressing its Net Tangible Asset (NTA) value to RM1. One of the shares sold was that of Repco which was owned by Teras Cemerlang (TC). [19] This was done against the will and consent of TC, therefore TC had to buy more Repco shares to consolidate its controlling in Repco. This was done on 3rd December 1997 when the Accused instructed PW16 to purchase Repco shares on behalf of TC. [20] DW2 a former senior Manager for Legal and Corporate affairs of Repco testified that the said purchase was for TC after he confirmed that matter with Patrick Au who was a director and share holder of TC. He 7 claimed that the purchases were “limit orders”, within specific limits instructed by the Accused. [21] DW2 further claimed that the shares were bought within the market valuation range of the share’s prices. [22] DW5, an expert on trading and the stock market who is a professor at Macquarie University, New South Wales, Australia called by the Accused testify and express his opinion that what transpired was a mixer of seller and buyer-initiated trades where the pattern of buying was suggestive of “averaging-in”. The accused, in his opinion did not take up the sellers at any price and the purchases were not aggressively pursued as the average purchase price of RM109.00 was well within Repco’s valuation band, namely between RM80.00-RM120.00. [23] DW4 from AWAS department of KLSE, under whose department monitors KLSE Surveillance Information System (SIS) confirmed that on the said date Repco shares did not fluctuate beyond the 10% threshold in price that would warrant the department to issue an Unusual Market Activity (UMA) enquiry to Repco. [24] The Accused further called another expert witness, DW8 who testified that after conducting extensive analysis and valuation of Repco shares as of 3rd December 1997 and review of PW20 evidence using residual income (RI) approach which allows an estimation of value without reference to price that it considers future expected earnings in determining value which is a more accurate analysis than that conducted by PW20. 8 Finding of the LSJ [25] The LSJ under the heading of Re-Eveluation Of Evidence Act. The Close of Defence Case at pages 133-168 para 31-100 (AR Jilid 1), had discuss in detail the defence advanced by the Accused and the prosecution’s case which had been accepted by the Court of Appeal when it ordered the Accused to enter his defence and came to a conclusion as stated at para 101-105. Finding of This Court [26] After hearing and reading through submissions by both parties and combing through the evidence of both the prosecution and the defence, I agree with the finding of the LSJ that the defence put forth by the Accused consist of an afterthought and mere denial. [27] The details of the accused’s instruction that the buying of Repco shares was meant for TC and his claim of having no knowledge of the opening of the second account of TC TE2190 was never put to the relevant prosecution witnesses especially PW16. Refer to Abdul Samid bin Edward v public Prosecutor [2015] MLJU 55, Adiswaran a/l Tharumaputrintar v Pendakwa Raya & Other Appeals [2014] MLJU 93 and PP v Saimin & Ors [1971] 2 MLJ 16. [28] Perusing the evidence of both PW20 and DW8, expert witnesses produced by the respective parties, I find that PW20’s evidence is more credible and find no reason to reject his opinion as by DW8’s own admission he admitted that his opinion may be biases as he had only relied on D158 and 159 which were given to him by the Accused. 9 [29] Furthermore, DW8 also admitted he did not consider the corporate announcements (P53-P70) and had no knowledge of the Asian Financial Crisis that attacked our stock market at the time in question. [30] On the question of whether the shares were bought at fair price, the evidence of PW20 analysis is accepted over that of DW5 and DW8 even though PW20 did not analysis D129 as even DW5 admitted it was not a suitable tool to be used to analysis the said manipulation of this is alleged one day occurrence. PW20 concluded that the rise from RM108.50 to RM113.00 per unit was very unusual price movement and volume of trade of Repco’s shares on the said date. [31] This court also took note of the fact that the day, 4th December 1997, the price of Repco’s shares fell. [32] All these shows that the Accused action on that day was clearly to calculated to create a misleading appearance of Repco’s share value at KLSE. Conclusion [33] After considering the LSJ’s analysis and finding made, I am satisfied that there is no appealable error committed by the LSJ that would warrant any intervention from this court. [34] I find that the conviction is safe and the Accused’s appeal against his conviction is hereby dismissed. 10 Sentence [35] The Accused was sentenced to imprisonment of five (5) years and a fine of RM5,000,000.00 (in default 5 months imprisonment). [36] After considering the seriousness of this offence, public interest in this matter whilst at the same time the offence does not impose a mandatory imprisonment, the fact that the accused is a first offender and this offence took place in 1997 (almost 20 years ago) I find that the sentence passed by the LSJ to be excessive. [37] I therefore substituted the sentence of imprisonment from 5 years to 1 year with effect from the date of this order and affirmed the fine of RM5 million. Dated : 29th October 2025 (AZHAR BIN ABDUL HAMID) Judge (Criminal Division) High Court, Kuala Lumpur 11 Parties Appearing: Counsel for Appellant : Tan Sri Muhammad Shafee bin Abdullah Sarah Abhishegam Chan Yen Hui Joshua Tay New Sin Yew (Messrs Chan Yuen Hui) Counsel for Respondent : Shoba Venugobal Mohd Izuddin bin Mohamed Mohd Hafiz bin Mohd Yusof (Securities Commission, Malaysia)