The trial of a director of public-listed construction company Wembley is expected to be one of the biggest prosecution cases to be undertaken by the Securities Commission (SC) to date.

Peter Ling Ee Kong, director of Wembley Industries Holdings Berhad (WIHB), was first charged in court on Oct 31 last year for "knowingly and willfully permitting the furnishing of a false statement to the Kuala Lumpur Stock Exchange in relation to WIHB's affairs."

Charged under subsection 122B(b) of the Securities Industry Act 1983, Ling's trial is being heard by Sessions Court judge Akhtar Tahir. Hearing began yesterday and will resume on Oct 20 for two days.

"It certainly is one of the bigger cases for us as it involves the director of a (public-listed) company, which in this case is Wembley," Securities' Commission prosecuting officer Azryain Borhan said when contacted today.

The SC claims that WIHB made false statement when it declared that none of its directors who were substantial stakeholders had a stake in the disposal of three WIIHB subsidiaries - Sun Metal Works, Wembley Process and Wembley Fluid Engineering.

The SC says that this was untrue as Ling had an indirect interest in the disposal. The subsidiaries were to be purchased by Great Structure Sdn Bhd.

If found guilty, Ling is liable to a fine of up to RM3 million or 10 years' imprisonment, or both.

Lag in prosecution

According to the New Straits Times , the court yesterday heard the testimony of Bursa Malaysia (formerly KLSE) listing department head Lam Chin Mee, who claimed that her department received notification from WIHB saying that its directors had no shares in the company that was buying WIHB's three subsidiaries.

Lam told the court that her department then sought further confirmation from Wembley in order to ascertain that its directors " ... had no equity in the buyer company (Great Structure)."

Asked to comment on the significance of the case, chief executive officer of Minority Shareholder Watchdog Group Yusof Abu Othman pointed out that prosecution of Ling has been long time coming.

"We don't know what is the reason for the prosecutors to take so long. It does imply the difficulty in getting evidence (before case can be tried)," he said when contacted.

But if viewed from the perspective that the evidence leading to a formal charge is often difficult to obtain, said Yusof, then "one has to be satisfied with what is happening."

"Having said that, it is a pity that this case is regarding something that happened six years ago. What is important now is to consider what every party can learn from here. Are the rules and regulations contributing to the delay (in obtaining evidence for prosecution)? The regulators may want to look into this issue," he added.

Project suspended

Main board-listed Wembley, an associate company of former Bakun-builder Ekran, has been suspended from trading since January last year.

Wembley itself was at one time one of Bakun's subcontractors. Currently, it is listed as the developer of the RM420 million Plaza Rakyat project beside Puduraya in Kuala Lumpur.

The project, which has been suspended, feature an intra-urban bus and taxi terminal, a six-level retail podium, a budget hotel, a roof-top park and an LRT station.

The SC's approval for Wembley's turnaround plan (for re-listing on the stock exchange) remains pending. Prior to that, the construction company was placed on trading restriction from March 2002.