Nobody but the SC can determine if insider trading happens in AMMB

THAT seven key personnel of AMMB Holdings Bhd had disposed their shares in large quantities prior to news of the banking group’s RM2.83 bil global settlement becoming official has certainly shaken the minority shareholder circle.

But to ascertain for sure if an act of insider trading has indeed been committed as alleged, it is all up to the Securities Commission (SC) to get to the root of the matter, according to Lya Rahman who is a strong advocator of corporate governance and shareholder activism.

Lya Rahman

“I am sure the SC will look at the matter and leave no stone unturned,” she told FocusM.

“If insider trading is indeed committed, such action does not only breach of the Capital Markets and Services Act 2007, but will also do gross injustice to the minority shareholders.

“If it is not insider trading, what is the motivation factor that moved the seven key personnel in AMMB to dispose their shares?”

The allegation of insider trading aside, Lya is also taken aback by news that AMMB has to pay RM2.83 bil – dubbed “mother of all fines” – as global settlement in relation to its involvement in the 1Malaysia Development Bhd (1MDB) scandal.

“Why was the settlement appeared to be like a last minute decision? Shouldn’t those responsible be taken to task especially the board members during that time?” she asked.

“What about the key executives that also involved in this scandal? Would this trigger the malus arrangement for reward remuneration paid to them?

“It is disappointing to see this happening in the company which has been ranked highly in terms of corporate governance (CG) and even bagged numerous awards based on CG assessment.

“At the end of day, the real victims are the minority shareholders.”

Recall that AMMB had in 2015 been slapped with a RM53.7 mil penalty by Bank Negara Malaysia (BNM) for what the banking group described as “non-compliance with certain regulations” in relation to its involvement in the 1MDB scandal.

This action was pursuant to Section 234 of the Financial Services Act (FSA) 2013 and Section 245 of the Islamic FSA 2013. Both Sections 234 and 245 are in relation to administrative actions that the central bank can take in the event a breach is committed under the respective acts. – March 12, 2021

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