Highlight SC, Bursa continue to probe CDS information leak claims as charges are serious

Highlight SC, Bursa continue to probe CDS information leak claims as charges are serious
Business & Markets 2013
Written by Lee Wen Ai of theedgemalaysia.com
Thursday, 14 March 2013 13:05


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KUALA LUMPUR (March 14): The Securities Commission Malaysia (SC) and Bursa Malaysia are still investigating allegations that investors’ confidential information in their CDS accounts has been leaked to strangers although the stock exchange failed to gather “credible” evidence now.

At a press conference after releasing SC’s annual report, SC chairman Datuk Ranjit Ajit Singh said in response to a question posed by theedgemalaysia.com:

"The SC has asked Bursa to conduct a report (investigation) on this. Bursa has undertaken a review and found, at the moment, that there was no credible evidence to support the allegations."

But he added: "Having said that, the review is still on-going at both the SC and Bursa levels. Given the importance of this, we will continue to engage relevant parties to obtain the necessary information and evidence to support the investigation."

To another question on whether the Ministry of Finance had ordered the SC to investigate the matter, the head of the capital market regulatory body said: "No, we have not been been asked by the Ministry of Finance to conduct a probe.”

On January 21, the Edge Financial Daily and its website theedgemalaysia.com reported that many investors had discovered that information of their CDS accounts on Bursa Malaysia has been leaked to strangers, who had called to offer advice and trading tips on specific speculative stocks with a promise of profit. Many investors had gained from this.

Several retail investors were questioning how the confidential information could have been leaked and they feared they had been roped into a network of market manipulation by syndicates, according to remisiers.

Sam Ng, president of the Remisiers’ Association of Malaysia, confirmed to the edgemalaysia.com that the association had received many phone calls from its members on this.

“We are seriously concerned about the situation as this kind of information should not have been leaked. I hope the Securities Commission (SC) or Bursa will investigate this matter as it does not augur well for the capital market,” he said then.

This “market manipulation” phenomenon, according to remisiers, has been going on for some time and was blatant on two counters in late 2012 and early 2013 — Tiger Synergy Bhd and PATIMAS COMPUTERS BHD [].

In its initial reaction and queries by the edgemalaysia.com, Bursa’s reply email said: “We will conduct a thorough investigation when there is an official complaint by any affected party.”

But it said any unauthorised release of CDS account holders’ information to third party constitutes a breach of provisions in the Securities Industry Central Depositories Act 1991, and the persons involved, if found guilty, would be liable for severe penalties, including imprisonment.