The High Court (Special Powers Division) struck out a civil suit brought by former Malaysian Merchant Marine Berhad Executive Deputy Chairman Dato’ Ramesh Rajaratnam against the Malaysia Securities Commission and the Government of Malaysia, which sought to invalidate the insider trading offence provision in section 188(2)(a) of the Capital Markets and Services Act 2007 on constitutional grounds. The court held the originating summons was an abuse of process and awarded costs of RM5,000 each to the SC and the Government. The suit, filed on 10 September 2024, argued section 188(2)(a) was contrary to Articles 5(1), 8(1) and (2), 10(1)(a) and 13 of the Federal Constitution. The SC applied on 8 October 2024 to strike out the action, contending it was barred by res judicata, amounted to an abuse of process, and constituted a collateral attack on Ramesh’s Sessions Court conviction and his ongoing criminal appeal. Ramesh had been charged in April 2015 with three insider trading offences under section 188(2)(a) and convicted after trial, receiving five years’ imprisonment and a RM3 million fine for each charge (with a default term of three years’ imprisonment). While the High Court set aside his convictions and sentences due to judicial copying, the Court of Appeal reinstated the conviction and sentence for the first charge and remitted the matter to the High Court for a merits hearing, which remains pending.
Malaysia Securities Commission 2025-05-15
Malaysia Securities Commission wins High Court strike-out of former MMM executive’s constitutional challenge to insider trading provision
The High Court (Special Powers Division) dismissed a civil suit by former Malaysian Merchant Marine Berhad Executive Deputy Chairman Dato’ Ramesh Rajaratnam against the Malaysia Securities Commission (SC) and the Government of Malaysia, challenging the insider trading provision in the Capital Markets and Services Act 2007. The court deemed the suit an abuse of process and awarded RM5,000 in costs to both the SC and the Government. The SC argued the suit was barred by res judicata and was a collateral attack on Ramesh's prior conviction and ongoing appeal.