Civil Penalty Enforcement Action for Insider Trading

Singapore, 19 July 2007...The Monetary Authority of Singapore (MAS) has taken civil penalty enforcement action against Mr Toh Ho Tay for contravening the insider trading provision under Section 218(2)(a) of the Securities and Futures Act (SFA). 

2   Labroy Marine Limited (Labroy), a company listed on the Mainboard of the Singapore Exchange Securities Trading Ltd (SGX-ST), announced on 27 June 2005 that its subsidiary Labroy Shipbuilding and Engineering Pte Ltd had signed a shipbuilding contract worth US$70 million (about S$117 million) for the construction of two carriers.  After the announcement, Labroy's share price closed at $0.805, a 5.9% increase over the preceding day's closing price of $0.76.

3   Between 13 and 20 June 2005, Mr Toh, an employee of Labroy handling shipbuilding contracts at that time, purchased a total of 270,000 Labroy shares while he was in possession of non-public price sensitive information concerning the shipbuilding contract obtained by virtue of his position in Labroy. As a result of the purchases, Mr Toh made a profit totaling about S$19,600.

4   Mr Toh has admitted to contravening Section 218(2)(a) of the SFA and will pay a civil penalty of S$50,000 to MAS without court action. Mr Toh cooperated with MAS in the course of the investigations.

5   This matter was referred to MAS by SGX-ST. Civil penalty investigations were carried out by MAS into the matter in accordance with standard operating procedures.

Notes to Editor:

(A) Insider Trading under Section 218(2)(a) of the SFA

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 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 of that corporation.

(B) Connected Person

Section 218(5) of the SFA provides that a person is connected to a corporation if - (a) he is an officer of that corporation or of a related corporation; (b) he is a substantial shareholder in that corporation or in a related corporation; or (c) he occupies a position that may reasonably be expected to give him access to information of a kind to which this section applies by virtue of - (i) any professional or business relationship existing between himself (or his employer or a corporation of which he is an officer) and that corporation or a related corporation; or (ii) being an officer of a substantial shareholder in that corporation or in a related corporation.

Section 218(6) of the SFA provides that for the purposes of Section 218(5), an officer in relation to a corporation includes (a) a director, secretary or employee of the corporation; (b) a receiver, or receiver and manager, of property of the corporation; (c) a judicial manager of the corporation; (d) a liquidator of the corporation; and (e) a trustee or other person administering a compromise or arrangement made between the corporation and another person.