KUALA LUMPUR: The Securities Commission Malaysia (SC) on 24 June 2024 initiated a civil suit at the Kuala Lumpur High Court against Dato’ Dr. Yu Kuan Chon (Yu) for market rigging and manipulation breaches involving shares in Shangri-La Hotels (M) Bhd (Shang).
According to the Statement of Claim filed by the SC, the regulator alleged that Yu had traded Shang shares between 1 March 2018 and 24 July 2018 in a manner that caused a surge in the traded volume and share price of Shang.
Yu had allegedly traded and transacted in Shang shares using 15 Central Depository System (CDS) accounts during the material period. His trades represented approximately 81.9% of the total volume of Shang shares traded on the market during this period.
The SC claimed that Yu had engaged in manipulative activities in the trading of Shang shares, and that Yu’s trading activities were in breach of sections 175(1) and/or 176(1) of the Capital Markets and Services Act 2007.
In its civil suit, the SC sought various orders which include for Yu to:
1. Pay the SC the following:
a) Disgorgement sum amounting to RM26,572,397.70 which is three times the amount of monetary gain of RM8,857,465.90 made by Yu as a result of the manipulation;
b) Civil penalty of RM1 million;
2. Be barred from:
a) Becoming a chief executive or director or be involved in the management of any public company or its subsidiaries whether directly or indirectly for a period of five years; and
b) Trading on the stock exchange for the same period.
Market manipulation undermines the integrity and transparency of capital markets, which can erode investor confidence and disrupt market efficiency.
The SC views market manipulation very seriously and will continue to maintain a strong enforcement stance to protect investors and uphold the integrity of the capital markets.
