The Monetary Authority of Singapore (MAS) has taken civil penalty enforcement action against Mr Goh Ing Sing and Mr Keu Haw Gee for insider trading under Section 219(2)(a) of the Securities and Futures Act (SFA).
2 On 13 August 2010, Wilmar International Limited (Wilmar) announced its intention to purchase 20% of the share capital of Kencana Agri Limited (Kencana), a company listed on the Singapore Exchange Securities Trading Ltd (SGX-ST), at $0.35 per share. After the release of the announcement, Kencana’s share price closed at $0.385, a 10% increase over the preceding day’s closing price of $0.35.
3 Mr Goh, the Group Plantation Head of Wilmar, and Mr Keu, the Plantation Head of Wilmar, were involved in the due diligence exercise conducted by Wilmar on Kencana’s plantations, prior to the announcement. While in possession of non-public price-sensitive information concerning Wilmar’s intention to invest in Kencana, Mr Goh and Mr Keu bought 626,000 and 50,000 Kencana shares respectively, on 5 and 6 August 2010. As a result of their purchases, Mr Goh and Mr Keu made profits of approximately $43,000 and $2,000 respectively.
4 Mr Goh and Mr Keu have admitted to contravening Section 219(2)(a) of the SFA and have paid to MAS civil penalties of $110,000 and $50,000 respectively, without court action.
5 The matter was referred to MAS by SGX-ST.
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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 an agreement with any person for that person to pay, with or without admission of liability, a civil penalty for contravening any provision of Part XII of the SFA. The civil penalty may be up to three times the amount of the profit gained or loss avoided by that person as a result of the contravention, subject to a minimum of $50,000 (if the person is not a corporation) or $100,000 (if the person is a corporation). Where the contravention did not result in the person gaining a profit or avoiding a loss, the civil penalty may be up to $2 million, subject to a minimum of $50,000..
(B) Insider Trading under section 219(2)(a) of the SFA
Section 219(2)(a) prohibits a person who is in possession of materially price-sensitive information concerning a corporation (to which he is not connected), which he knows is materially 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.
