ACE Holdings’ application for judicial review will now go to the “substantive stage” where the full merits of the case will be argued via documentary evidence and will be decided by the court.

KUALA LUMPUR (July 18): ACE Holdings Bhd has secured leave (permission) from the High Court to commence a judicial review against the Securities Commission Malaysia (SC) for imposing a fine of RM400,000 and a reprimand against the company by way of administrative action.

High Court judge Datuk Ahmad Kamal Md Shahid in his decision on Tuesday (July 18) allowed ACE Holdings' leave application.

This means that ACE Holdings' application for judicial review will now go to the “substantive stage” where the full merits of the case will be argued via documentary evidence and will be decided by the court.

The main grounds cited by ACE Holdings for the judicial review is that the SC's decision to impose the penalties against the company by way of Section 354(4) of the Capital Markets and Services Act 2007 (CMSA) read with Section 152(2)(a) of the Securities Commission Act 1993 is ultra vires (outside the boundaries of law).

According to the SC’s website, the regulator had reprimanded ACE Group over its investment scheme in December 2018. It said ACE Holdings had breached the CMSA for the issuance of private placement information memoranda dated Sept 8, 2015, and Jan 5, 2018, which contained “false or misleading information”.

This “false or misleading information” related to the issued and paid-up capital of ACE Credit, the targeted amount of funds to be raised, utilisation of the proceeds and ACE Holdings’ past record of funds raised, the SC added.

The commission also claim that during their investigations on ACE Holdings, the SC had disclosed inconsistent particulars of the administrative charge against ACE Holdings leading to a breach of natural justice when deciding to impose the penalties of RM400,000 and the said reprimand.

ACE Holdings was represented by Muhammad Farhan Shafee and Alaistair Brandah Norman of Messrs Shafee & Co.

This application for judicial review is part of a larger dispute between Ace Holdings and the SC in relation to Ace Holdings’ prior acquisition of shares in Apex Equity, which owns Apex Securities Bhd. The shares in Apex Equity have since been disposed of by ACE Holdings.

In a filing on Dec 1, 2022, Apex Equity said the SC is seeking a court declaration that its subsidiary Apex Securities has contravened securities laws, and that ACE Holdings, which is part of the ACE Group, has been knowingly involved in the contravention.

The SC claimed that Apex Securities contravened the securities laws "as ACE has become a controller of Apex Securities, when ACE is not a fit and proper person" to do so.

In another suit, the regulator is seeking a court order to refrain ACE from being a controller, not just of Apex Securities, but of any holder of a Capital Markets and Service Licence (CMSL).

It also wants ACE to remove relevant directors and senior management personnel from Apex Equity and Apex Securities.

Both Ace Holdings and Apex Securities have filed applications to strike out the suit by the SC on the basis that ACE Holdings is no longer a shareholder of Apex Equity and that the suit has been rendered academic.

ACE Group previously held a 14.98% stake in Apex Equity through ACE Credit (M) Sdn Bhd.

According to the CMSA, a controller of a CMSL holder controls 15% of the company, or has the power to appoint a majority of the directors of the company, or has the power to effect decisions in the business.

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