1 Singapore, 6 December 2011… The Monetary Authority of Singapore (MAS) has taken civil penalty enforcement action against Mr Yao Hongyuan for contravening the insider trading provision under section 218(2)(a) of the Securities and Futures Act (SFA).
2 Shanghai Asia Holdings Ltd (SAHL), a company listed on the Singapore Exchange Securities Trading Ltd (SGX-ST), made an announcement on 29 July 2010 indicating that a third party had approached SAHL to acquire substantially all of SAHL’s assets. Between 5 and 18 May 2010, Mr Yao, a Chinese national based in Jiangsu, China, who had introduced the potential buyer to SAHL, purchased a total of 364,000 SAHL shares while he was in possession of non-public price sensitive information concerning the potential acquisition.
3 Mr Yao has admitted to contravening section 218(2)(a) of the SFA and has paid a civil penalty of $50,000 to MAS without court action. Mr Yao has cooperated fully with MAS in the course of the investigation.
4 Mr Leo Mun Wai, Assistant Managing Director (Capital Markets), MAS, said: "MAS takes a serious view of insider trading. This case demonstrates the resolve of MAS in pursuing insider trading offenders, including those residing overseas. Listed Companies are reminded to ensure that parties who access confidential and price-sensitive information are aware of their obligations under the law.”
Notes to Editor:
(A) The civil penalty regime
(i) A civil penalty action is not a criminal action and does not attract criminal sanctions. The civil penalty regime, designed to complement criminal sanctions and provide a nuanced approach to combat market misconduct, became operational at the beginning of 2004.
(ii) Under section 232 of the SFA, MAS may enter into agreements with any person for that person to pay, with or without admission of liability, a civil penalty for a contravention of any provision of the SFA, Part XII, of a sum not exceeding three times the amount of the profit gained or loss avoided by that person, subject to a minimum of $50,000, where the contravention has resulted in the person gaining a profit or avoiding a loss.
(B) 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.
(C) Connected Person
Section 218(5) of the SFA provides that a person is connected to a corporation if, amongst others, he occupies a position that may reasonably be expected to give him access to information of a kind to which Section 218 applies by virtue of 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.
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