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Singapore, 7 February 2006...The Monetary Authority of Singapore (MAS) announced that civil penalty enforcement action has been taken against Mr Frankie Quek Swee Heng and Ms Lee Boon Hiok for contravening the insider trading provisions under sections 218 and 219 of the Securities and Futures Act (SFA).
2. On 17 October 2003, BreadTalk Limited (BreadTalk), a company listed on SGX-SESDAQ, announced that its wholly-owned subsidiary Breadtalk Pte Ltd had signed a master franchise agreement with a food and beverage and real estate company incorporated and based in the State of Kuwait. In the announcement, BreadTalk also disclosed that, barring unforeseen circumstances, it expected a positive contribution from the franchise agreement to its earnings for its financial year ending 31 December 2003.
3. Between 8 and 13 October 2003, Mr Quek, BreadTalk's Group General Manager, purchased approximately 600,000 BreadTalk shares and procured Ms Lee to purchase approximately 1.4 million BreadTalk shares. The purchases were made through a share trading account in Hong Kong maintained in the name of Ms Lee. At the time of the share purchases, Mr Quek and Ms Lee were in possession of non-public material price sensitive information concerning the franchise agreement. As a result of the share purchases, Mr Quek and Ms Lee made gains of approximately S$35,000 and S$81,000 respectively.
4. Mr Quek and Ms Lee have admitted to contravening the insider trading provisions under the SFA, and will pay civil penalties to MAS without court action. Mr Quek will pay a penalty of S$200,000 for contravening sections 218(2)(a) and 218(2)(b) of the SFA, and Ms Lee will pay a penalty of $105,000 for contravening section 219(2)(a) of the SFA. The higher civil penalty amount imposed on Mr Quek took into account the fact that he had obtained the inside information through his position in BreadTalk, and also that he had procured Ms Lee's purchases of the BreadTalk shares.
5. The matter was referred to MAS by the Singapore Exchange Securities Trading Ltd. As the insider trades were conducted using a securities trading account in Hong Kong, MAS sought the assistance of the Hong Kong Securities and Futures Commission (HKSFC) under existing mutual cooperation arrangements. Civil investigations were carried out by MAS into the matter in accordance with standard operating procedures.
6. Mr Shane Tregillis, Deputy Managing Director (Market Conduct), MAS, said, "This case highlights the importance of international regulatory cooperation in ensuring market integrity in cross border transactions. We appreciate the HKSFC's assistance. This enforcement action is a clear signal that MAS is prepared and able to pursue infractions of our securities law, even where perpetrators seek to avoid detection and enforcement by using trading accounts located overseas."
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Notes to Editor:
A. Insider Trading under Section 218 of the SFA
(i) Section 218(2)(a) of the SFA prohibits a person who is in possession of material price sensitive information concerning a corporation (to which he is connected), which he knows is not generally available and material price sensitive, from subscribing for, purchasing, selling, or entering into an agreement to subscribe for, purchase or sell those securities of that corporation.
(ii) Section 218(2)(b) of the SFA prohibits a person who is in possession of material price sensitive information concerning a corporation (to which he is connected), which he knows is not generally available and material price sensitive, from procuring another person to subscribe for, purchase, sell, or enter into an agreement to subscribe for, purchase or sell those securities of that corporation.
B. Insider Trading under section 219(2)(a) of the SFA
Section 219(2)(a) of the SFA prohibits a person who is in possession of material price sensitive information concerning any securities, which he knows is material price sensitive and not generally available, from subscribing for, purchasing, selling, or entering into an agreement to subscribe for, purchase or sell those securities.
C. Memorandum of Understanding between MAS and HKSFC
MAS has a Memorandum of Understanding with the HKSFC for mutual cooperation and information sharing to enhance the regulation, supervision and enforcement of the securities and futures laws of Singapore and Hong Kong.
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