Civil Penalty Enforcement Action for Insider Trading

Singapore, 25 September 2007...The Monetary Authority of Singapore (MAS) has taken civil penalty enforcement action against Mr Wong Chin Ming for two separate insider trading contraventions under Sections 218(2)(a) and 218(2)(b) of the Securities and Futures Act (SFA).

2   AEM-Evertech Holdings Limited (AEM-Evertech), a company listed on the Mainboard of the Singapore Exchange Securities Trading Ltd (SGX-ST), made two announcements on 17 July 2006 and 4 August 2006 concerning its financial performance for the Financial Year (FY) 2006. 

3  On 17 July 2006, AEM-Evertech disclosed that the total revenue from its equipment sales in the first half of FY 2006 (1H2006 Equipment Sales Results) had increased significantly as compared to 2005. After the announcement, AEM-Evertech’s share price closed at $0.175, a 9.4% increase over the preceding day’s closing price of $0.16. Mr Wong, a Senior Vice President of AEM-Evertech at that time, purchased a total of 200,000 AEM-Evertech shares on 17 July 2006, before the announcement. 

4  On 4 August 2006, AEM-Evertech disclosed that its total revenue and net profit for the first half of FY 2006 (1H FY2006 Financial Results) had increased significantly as compared to same period in the previous year.  After the announcement, AEM-Evertech’s share price closed at $0.21, a 13.5% increase over the preceding day’s closing price of $0.185.  Mr Wong encouraged his wife, Mdm Sher Lee Yong, to purchase 200,000 AEM-Evertech shares on 26 July and 2 August 2006. 

5   In these instances, Mr Wong was in possession of non-public price sensitive information concerning the 1H2006 Equipment Sales Results and 1H FY 2006 Financial Results by virtue of his position in AEM-Evertech. These purchases resulted in a profit of S$12,500.

6   Mr Wong has admitted to civil penalty liability for contravening Sections 218(2)(a) and 218(2)(b) of the SFA and will pay a civil penalty of S$100,000 to MAS without court action. Mr Wong cooperated with MAS in the course of the investigations.

7   Mr Shane Tregillis, Deputy Managing Director (Market Conduct), MAS, said, "A person in possession of material price sensitive information breaches insider trading laws by encouraging someone else to trade in the relevant securities, even if he does so without mentioning the precise nature of the inside information.  MAS will take action against anyone engaging in such conduct."

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Notes to Editor:

(A) Insider Trading under Sections 218(2)(a) and 218(2)(b) 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.

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 material price sensitive and not generally available, 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.

Section 217 of the SFA provides that a person is taken to procure the act or omission by the other person if the former incites, induces or encourages an act or omission by the latter.

(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.

(C) Civil Penalty Quantum

Under Section 232 of the SFA, the Court may, if satisfied that a person has contravened a provision in the SFA, Part XII, make an order against that person for the payment of a minimum civil penalty of $50,000.