KUALA LUMPUR: The Securities Commission has charged a director of Linear Corporation Bhd, Eswaramoorthy Pillay s/o Amuther for abetment in a securities fraud.

The SC said on Tuesday, June 29 Pillay had abetted ex-LFE Corporation Bhd director Alan Rajendram a/l Jeya Rajendram in committing securities fraud and four other Penal Code offences.

The charges against Pillay followed last week's charging of Alan at the Sessions Court.

According to the SC statement, Pillay, 44, was charged under section 87A(b) read together with section 122C(c) of the Securities Industry Act 1983 for abetting Alan to commit an act that operated as a fraud on LFE.

The fraud involved the use of RM9 million of LFE's monies to finance Alan's purchases of LFE shares pursuant to a private placement and restricted offer of LFE shares.

The alleged act is said to have been committed between Jan 4, 2007 and Feb 8,  2007. If convicted, Pillay is liable to a fine of not less than RM1 million and imprisonment for a term not exceeding 10 years.

Apart from the securities law breach, Pillay was also charged under section 409 read together with section 109 of the Penal Code for abetting Alan to commit criminal breach of trust of a further RM9.99 million of LFE's monies.

Another three charges were also preferred against Pillay for abetting two other LFE directors of LFE in cheating EON Bank Bhd of RM3.96 million by supplying fictitious documents to enable the drawdown on LFE's banking facilities.

Pillay pleaded not guilty to all five charges. He was granted bail of RM1 million with one surety.

He was further required to surrender all his travel documents to Court. The case will be mentioned on July 27,  2010.

Pillay, 44, and currently a director of Linear, was charged under section 87A(b) read together with section 122C(c) of the Securities Industry Act 1983 for abetting Alan to commit an act that operated as a fraud on LFE.

The fraud involved the use of RM9 million of LFE's monies to finance Alan's purchases of LFE shares pursuant to a private placement and restricted offer of LFE shares. The alleged act is said to have been committed between Jan 4, 2007 and Feb 8, 2007. If convicted, Pillay is liable to a fine of not less than RM1 million and imprisonment for a term not exceeding 10 years.

Apart from the securities law breach, Pillay was also charged under section 409 read together with section 109 of the Penal Code for abetting Alan to commit criminal breach of trust of a further RM9.99 million of LFE's monies.

Another three charges were also preferred against Pillay for abetting two other Directors of LFE in cheating EON Bank Berhad of RM3.96 million by supplying fictitious documents to enable the drawdown on LFE's banking facilities. Pillay pleaded not guilty to all five charges.

Pillay was granted bail of RM1 million with one surety. He was further required to surrender all his travel documents to Court. The case will be mentioned on July 27, 2010.