KUALA LUMPUR - A senior officer with a shipping company has been charged with insider trading involving 10.2 million shares of the now delisted firm.
Former deputy executive chairman Datuk Ramesh Rajaratnam, 50, was hit with three counts of disposing of Malaysian Merchant Marine Bhd (MMM) shares while in possession of insider information about the company's financial situation.
Dressed in a dark shirt and blazer, he claimed trial to all charges in the Sessions Court yesterday.
According to the charge sheet, the insider information was that Malaysian Rating Agency Berhad would be downgrading the credit rating of MMM's RM120mil (S$44 mllion) Al Bai Bithaman Ajil Islamic Debt Securities (BaIDS) from A to BB.
Ramesh is also alleged to have known the company was going to be classified as PN17 (having some financial difficulties).
MMM was declared PN17 in March 2010 and was wound up by September 2011.
It was reported that the rating agency had been continuously downgrading MMM's bonds from its A rating since Dec 19, 2009, and eventually downgraded its rating on MMM's RM120mil BaIDS from C to a D rating.
Ramesh is accused of disposing of the shares in three tranches - 500,000, then 201,300 and 4,999,500 more shares - through Bursa Malaysia Securities Berhad between Jan 11 and Feb 20, 2010.
The offences under Section 188(2)(a) of the Capital Markets & Services Act 2007 carries a maximum 10 years in prison and a minimum RM1mil fine.
Prosecuting officer from the Securities Commission, Hasley Tajudin, said it was a non-bailable offence, and urged the court to set a high bail should it allow Ramesh out on bond.
Ramesh's lawyer R. Thiru Chelvam pleaded that his client be given a RM200,000 bail and be allowed to keep his passport as he now worked as a consultant to companies in India and China.
"My client did not sell the stocks with ill-intent, but to deal with the financial difficulties faced by his company then," said Thiru.
However, Judge Norsyaridah Awang cut off the lawyer, saying it was not yet time to argue Ramesh's case.
The judge set bail at RM200,000 with one surety, and ordered Ramesh to surrender his passport at the next mention on May 29.