SUCB executive chairman and group managing director Datuk Seri Stanley Thai  and  his  wife  Datin  Seri  Cheryl  Tan  were  charged  yesterday  by  the Securities  Commission  with  insider  trading  regarding  shares  of  APL Industries  Bhd  (APLI)  back  in  2007.  Datuk  Stanley  Thai  allegedly communicated insider information to remisier, Mr. Tiong Kiong Choon that was expected to have material effect on the price and value of APLI seven years ago. Mr. Tiong was charged last week with selling approximately 6m APLI shares through accounts of his family members from 26th Oct to 29th Oct 2007. (Source: The Star)

Comment: Datuk Stanley Thai and Datin Cheryl Tan own a  total of 35.74% of SUCB and are key managers of the group. Even though valuation has become attractive after the 16.5% decline in share price yesterday and the management  has  clarified  that  business  operations  are  not  affected,  the insider  trading  charges  are  likely  to  overshadow  financials,  at  least  in  the short term.

We are maintain our REDUCE call pending a meeting with management.

Source: Affin Hwang Capital Research - 16 Dec 2014