SC wins case against a former director for causing wrongful loss to listed company

On 17 December 2019, the High Court ruled in favour of the Securities Commission Malaysia in a case that it had initiated against a former Deputy Managing Director (‘Former Director’) of a listed company (‘PLC’) for breach of section 317A of the CMSA, which provides, inter alia, that a director or officer shall not do or cause anyone to do anything with the intention of causing wrongful loss to a listed corporation or any of its related corporations.
The High Court found that out of a sum of RM11.59 million paid by the PLC to third parties, a sum of RM11.54 million was subsequently paid by the third parties to the Former Director, thereby causing wrongful loss to the PLC.
The Court ordered the Former Director to pay the Securities Commission the sum of RM11.54 million, which is to be held in trust for the PLC. The Court also ordered the Former Director to pay a civil penalty of RM1.0 million and barred the Former Director from being a director of a public-listed company for five years.