Civil Penalty Enforcement Action for Insider Trading

Singapore, 1 September 2008...The Monetary Authority of Singapore (MAS) has taken civil penalty enforcement action against Mr Yap Sew for insider trading under Section 218(2)(a) of the Securities and Futures Act (SFA).

2   See Hup Seng Limited ("SHS"), a company listed on the Singapore Exchange Securities Trading Ltd (SGX-ST), announced on 25 July 2006 that it had entered into an agreement to acquire Speedo Corrosion Control Pte Ltd for a total consideration of S$3.5 million from CT Holdings Pte Ltd. 

3   Between 21 and 24 July 2006, Mr Yap, a consultant of SHS at that time, purchased a total of 900,000 SHS shares while he was in possession of non-public price sensitive information concerning the acquisition obtained by virtue of his position in SHS.  As a result, he made a profit of about S$4,020.

4   Mr Yap has admitted to civil penalty liability for contravening Section 218(2)(a) of the SFA and will pay a civil penalty of S$50,000 to MAS without court action.  Mr Yap has cooperated fully during the course of MAS’ investigation.

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 Sections 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.

***