KUALA LUMPUR, July 1 — Star Publications Bhd applied today for a judicial review at the High Court here alleging interference and intimidation of The Star journalist B. K. Sidhu’s counsel during her recent questioning by the Securities Commission (SC) over the Kenmark affair.

The affidavit by The Star’s legal manager, Soh Sze Jean, stated that the SC attempted to coerce a statement from Sidhu’s lawyer, Tharminder Singh, in contravention of solicitor-client privilege.

SC investigating officer Arif Adnan Zain had issued a notice under Section 134(1)(b) of the Securities Commission Act 1993 on June 29 demanding that Tharminder go in to be “examined orally in relation to an investigation into an offence under the securities law”.

This followed an incident in which Sidhu refused to hand over notes she made during her interview with the SC on the same day.

The application seeks a declaration by the High Court that the SC does not have the power to compel a statement from counsel, nor can it impose restrictions on counsel’s role during interviews.

“The decision of the SC to issue the said notice pursuant to that particular section is wrong so therefore we are asking the court to quash that decision,” The Star’s lawyer Amer Hamzah Arshad said.

He explained that communications between Tharminder and Sidhu were privileged, and that The Star was not waiving its right to this privilege.

“Solicitor-client privilege is something which is sacred and important because otherwise the administration of justice will crumble,” he said.

“So SC cannot then issue a notice pursuant to that particular section requesting for Tharminder to give a statement because if he complies with that notice, under that particular section he is obliged to answer all questions.

“That may also be questions in relation to what communication or advice given to Ms B. K. Sidhu and that is protected is under the solicitor-client privilege.”

Those called to interview under Section 134(1)(b) of the Securities Commission Act 1993 are subject to Section 134(2) of the same act: “A person referred to in subsection (1) shall be legally bound to answer all questions relating to such case put to him by the Investigating Officer of the Commission and to state the truth, whether or not the statement is made wholly or partly in answer to questions, and shall not refuse to answer any question on the ground that it tends to incriminate him.”

Additionally, the lawyer said that failure to comply with the SC’s notice is an offence under Section 134(5) of the Securities Commission Act 1993 punishable by imprisonment or a fine.

Judge Aziah Ali granted an interrim stay pending disposal of the substantive application, during which time Amer Hamzah will serve the relevant documents to the Attorney-General’s chambers. The leave application will be heard on July 8.

The SC recently confirmed that it had questioned Sidhu but insisted that it followed strict guidelines throughout and did not mistreat her.

The commission was mum on whether or not its investigation had anything to do with the Kenmark saga.

However, it is understood that all of Sidhu’s reports on the case being investigated by the SC — which were submitted together with the affidavit — were on the troubled furniture maker.

Kenmark Industrial Co Bhd’s troubles began when its Taiwanese managing director James Hwang mysteriously disappeared — leading to a plunge in share price and plant closures in Port Klang and Vietnam — only to resurface nearly a week later, claiming his absence was due to illness.

During Hwang’s absence, Datuk Ishak Ismail entered the market and amassed shares amounting to a 32.36 per cent stake in the company over 10 days at prices of between 5.8 sen and 6.0 sen.

Ishak claimed to have bought the shares in a bid to help out his friend Hwang and to offer re-employment to the company’s workers.

However, Ishak later sold his direct and indirect stake in Kenmark between June 9 and June 11 at between 14 sen and 16 sen after failing to convince Hwang to return to the company.

The SC obtained a High Court order on June 16 to stop Ishak from using or dealing with proceeds from the sale of shares in Kenmark as part of a move to probe possible insider trading.

With the ex parte injunction, the SC successfully stopped Ishak, initially considered a white knight, from dealing with RM10.16 million of the proceeds from his sale of the shares.

It is understood that the total number of shares involved was 57.6 million shares.

Hwang and fellow Taiwanese, Chen Wen-Ling, have slashed their stakes in Kenmark as well.

Hwang reduced his stake to 8.41 per cent from 29 per cent, while Chen cut hers to 7.76 per cent from 16 per cent. The two now have a combined 15.17 per cent stake in Kenmark.

In 2001, Ishak was convicted for disclosing false information to the SC in a proposal by Idris Hydraulic for saying he did not hold any shares in KFC.

The information submitted was in connection with a proposal for the acquisition of an asset of KFC by Idris Hydraulic.

Ishak pleaded guilty and was convicted on Aug 23, 2001. He was fined RM400,000, in default six months’ jail.

In 2003, Ishak, as a director of Idris Hydraulic, was also fined RM400,000 for misusing RM50 million of the proceeds raised from the disposal of Kewangan Bersatu Bhd.

His emergence in relation to Kenmark ended his long absence from the corporate scene.