MAS takes Civil Penalty Enforcement Action Against Oh Kian Guan for Contravening the Law against the Employment of Manipulative and Deceptive Devices and the Requirement to Notify the Securities Exchange of Changes in Shareholdings
Singapore, 3 July 2013… The Monetary Authority of Singapore (MAS) has taken civil penalty enforcement action against Mr Oh Kian Guan for contravening Section 201(b) of the Securities and Futures Act (SFA), which prohibits the employment of manipulative and deceptive devices in connection with the subscription, purchase or sale of securities.
2 Between 1 July 2007 and 31 August 2008, Mr Oh had used securities trading accounts maintained by various persons with a number of brokerages to conduct trades in the shares of Fuji Offset Plates Manufacturing Ltd (Fuji), for his own benefit. Mr Oh’s actions deceived the brokerage houses into believing that the accounts were opened and operated for the benefit of the respective account holders, when the beneficial owner of the trades in the accounts was in fact Mr Oh.
3 As a substantial shareholder of Fuji, Mr Oh also contravened Section 137 of the SFA, in force at the material time, which required substantial shareholders of listed companies to notify the securities exchange of changes in their shareholdings. Mr Oh had failed to notify the Singapore Exchange Securities Trading Limited (SGX-ST) and Fuji of the changes in his deemed shareholdings in Fuji, which took place between 1 July 2007 and 31 August 2008.
4 Mr Oh has admitted to contravening Sections 201(b) and 137 of the SFA and paid
(i) a civil penalty of $100,000, without court action, in respect of the Section 201(b) contravention; and
(ii) a composition amount of $18,000 in respect of the Section 137 contraventions.
5 This matter was referred to MAS by SGX-ST.
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 Part XII of the SFA, of a sum not exceeding
- three times the amount of the profit gained or loss avoided by that person, subject to a minimum of either $50,000 (if the person is not a corporation) or $100,000 (if the person is a corporation); or
- (where the contravention has not resulted in the person gaining a profit or avoiding a loss) $2 million, subject to a minimum of $50,000.
(iii) In determining the quantum of civil penalties to seek in such actions, MAS takes into consideration all facts and circumstances relating to the contravention and the contravening person.
(B) Employment of Manipulative and Deceptive Devices under section 201(b) of the SFA
Under section 201(b) of the SFA, no person shall, directly or indirectly, in connection with the subscription, purchase or sale of any securities engage in any act, practice or course of business which operates as a fraud or deception, or is likely to operate as a fraud or deception, upon any person.
(C) Duty of substantial shareholders to notify securities exchange under section 137 of the SFA (in force at the material time)
Under section 137 of the SFA, in force at the material time (which emulated, with such modifications as necessary, Division 4 of Part IV of the Companies Act (CA)), where there is a change in the percentage level of the interest of a substantial shareholder in a company, the substantial shareholder shall give notice in writing to the securities exchange within 2 business days after he becomes aware of such a change.
Under section 81(1) of the CA, a person has a substantial shareholding in a company if he has an interest in one or more voting shares in the company and the total votes attached to those shares is not less than 5% of the total votes attached to all the voting shares in the company.