Wednesday, 14 December 2011

Proton, possible insider trading?

The share price of Proton went hugely up especially in the middle of November and the first days of December. So much that on December 6, 2011 the trading of the shares was halted:

"Kindly be advised that trading in the above Company's securities has been halted with effect from 10.20 a.m., Tuesday, 6 December 2011. Trading in the securities will resume with effect from 11.20 a.m., Tuesday, 6 December 2011."

The company made the following standard announcement, regarding unusual market activity:

"We refer to Bursa Malaysia's telephone query on Monday, 5 December 2011 on unusual market activity in relation to PROTON's shares and the Article entitled "Khazanah to invite bids for PROTON" appearing on page 10 of the Edge (week of 5 December 2011 - 11 December 2011).

The Board of Directors of PROTON wishes to clarify that after making due enquiry with the Board of Directors and major shareholders, the Company is not aware of any reason for the unusual market activity in the shares of the Company recently, and further, that there is no material corporate development not previously disclosed. The focus of Management is to improve the performance of the Company and business is as usual.

The Company hereby undertakes to make all necessary disclosures to Bursa Malaysia in accordance with the provisions of the Main Market Listing Requirements."

But on December 12, 2011 newspaper articles appeared in The Star and New Straits Times

And Proton made the following announcement:

"Reference is drawn to the following Articles appearing in the newspapers on Monday, 12 December 2011:

1. "DRB-Hicom to buy into Proton" appearing on Page 6 of the New Straits Times; and
2. "Khazanah selling Proton stake to DRB-HICOM" appearing on Page 1 (Star Biz), of The Star.

The Board of Directors of PROTON Holdings Berhad wishes to inform that after making due enquiry with the Major Shareholder, Khazanah Nasional Berhad ("Khazanah") has informed that, in its normal course of business, it regularly receives proposals, enquiries and expressions of interest in relation to its various investments and companies where it has interest in, including PROTON. Khazanah will make necessary disclosure at the appropriate time.

We wish to reiterate that in the meantime, business is as usual at PROTON and the Company once again undertakes to make all necessary disclosure to Bursa Malaysia in accordance with the provisions of the Main Market Listing Requirements."

The text is clearly different from the announcement on December 6, 2011.

Another article from Business Times:

It will be interesting to follow this case. If indeed there will be a corporate development around Proton, then the possibility of insider trading looks real. And the authorities are still busy with the MAS/AirAsia insider trading case.


  1. I think this kinda thing happens to almost every company that made price-sensitive announcements. There's always a huge run-up prior to any public M&A announcements.

  2. Yes, I am afraid I agree, but it is a very serious offence, unfortunately enforcement is very weak, only recently a few fines but without admitting guilt and of up to 8 years ago.

  3. the fact they did not suspend for material information announcement nor denying totally a possible take over of the stake....make it seems like insider trading.

  4. I am also puzzled especially about their first announcement, things do not look good, let's wait and see.