The Securities Commission ("SC"), established primarily as a watchdog for the securities and futures market in Malaysia, took another step to restore investor's confidence in the capital market. It instituted a civil suit to compel a licensed fund management company and its representative to reimburse 75 investors an aggregate sum of RM1.93 million that was unlawfully solicited from them. Although licensed to carry out fund management relating to securities only, the fund management company and its representative had allegedly carried out an investment scheme fund which involved gold structured products, an activity that violated the conditions attached to their licences.

This action against the fund manager was the newest of a series of actions taken by the SC of late to weed out undesirable and illegal practices. It was barely 5 weeks ago that the SC "scored a first" when it instituted legal proceedings against a managing director of a public listed company to recover a part of the proceeds raised from an initial public offering that the managing director had allegedly misused for personal gains.

The SC had earlier taken 2 unprecedented actions. In the first one, it obtained an injunction to restrain a listed company and its solicitors from dealing with proceeds from the sale of immovable properties which were made without shareholders' approval whilst in the second action, the SC obtained a worldwide mareva injunction to prevent an Internet investment scam from disposing its assets and to repatriate the ill-gotten gains amounting to RM35 million back to Malaysia.  

Collectively, the court actions underpin the commitment of the SC to protect investors and to demand accountability from listed companies. With the recently enacted Capital Markets and Services Act 2007 arming the SC with more power, it comes as no surprise if the SC continues to hog the limelight.
 
Written by David Lee
Senior Associate
Tay & Partners
6th Floor, Plaza See Hoy Chan
Jalan Raja Chulan
50200 Kuala Lumpur
Malaysia
Phone: 03-2050 1888
Fax: 03-2072 6354
E-mail: david.lee@taypartners.com.my