This article first appeared in The Edge Financial Daily on September 12, 2019 - September 18, 2019

KUALA LUMPUR: Former Malaysian Merchant Marine Bhd (MMM) executive deputy chairman Datuk Ramesh Rajaratnam was found guilty of insider trading by the Sessions Court yesterday.

Ramesh, 55, was sentenced to five years in jail and fined RM9 million, following a full trial with 24 witnesses testifying, said the Securities Commission Malaysia (SC) in a statement.

The SC said Judge Azman Ahmad convicted Ramesh on all charges, but allowed a stay of his jail sentence pending an appeal.

The judge, however, ordered the RM9 million fine to be paid by yesterday, failing which Ramesh must serve a default jail term of nine years. It is understood that Ramesh failed to pay the fine yesterday.

Ramesh was charged in April 2015 with three counts of insider trading under the Capital Markets and Services Act 2007 (CMSA).

He was accused of disposing of 10,200,800 of MMM shares while in possession of material non-public information in relation to the proposed downgrade by Malaysian Rating Corp Bhd (MARC) on the credit rating of MMM’s Al-Bai Bithaman Ajil Islamic Debt Securities, which was made public by MARC on Feb 4, 2010, said SC.

According to the regulator, the disposals of the MMM shares were made on Jan 11, Feb 19 and Feb 22 in 2010.

Ramesh was also found to be in possession of material non-public information relating to MMM as a Practice Note 17 (PN17) company.

MMM, a shipping and logistics company, fell into PN17 status in March 2010, and was delisted from Bursa Malaysia in March 2011.

Insider trading is an offence under Section 188(2)(a) of the CMSA and carries a punishment of an imprisonment term not exceeding 10 years and a fine of not less than RM1 million.