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Why were the insider trading charges dropped?
FocusM team | 11 Aug 2017 00:30
When the Securities Commission (SC) recently dropped insider trading charges against the former executive director of Kencana Petroleum Bhd, Datuk Yeow Kheng Chew, and two others, it raised eyebrows. 

The SC said it dropped the charges on the instructions of the Attorney-General (AG). The SC, however, promptly filed a civil suit against the trio seeking a declaration that they had contravened regulations under the Capital Markets and Services Act 2007 (CMSA).

So far, no explanation has been offered by the AG on why the charges were dropped. But it does seem unusual for charges to be dropped once the accused are charged in court.  
Yeow was charged last year with Paulene Chee Yuet Fang and Tan Yee Chee. The three were allegedly involved in insider trading in relation to the proposed merger of Kencana Petroleum and SapuraCrest Petroleum Bhd in 2011.  
The SC does not have prosecution powers. The AG has the sole power to prosecute or drop any criminal charges. 
The SC is not alone. Even other key enforcement agencies such as the police and Malaysian Anti-Corruption Commission (MACC) have no prosecution powers. What it means is that all their painstaking investigations can come to naught if the AG decides not to press charges.

The AG’s Chambers may have its own reasons for coming to a decision and does not usually make it public. Sometimes, if there is insufficient evidence to prosecute, it may request an enforcement body to build a stronger case.

This raises the question of how effective the SC, MACC or police are in terms of being able to press charges against suspected criminals. They will have to depend on the AG. 

In some countries, enforcement agencies have prosecution powers. In that way, there is a check and balance where the decision to prosecute does not lie with one person alone. There will also be less finger-pointing at the AG as the burden to prosecute will be borne by others too. 

Recently, the Cabinet decided that the Judicial and Legal Service Commission should be headed by two people, and not by the AG alone, as it creates the appearance of a conflict of interest. It was suggested that prosecutors (Legal Services) can be headed by the AG while sessions court judges and magistrates (Judicial Services) can be headed by the Chief Registrar of the Federal Court. 

We can't agree more.

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