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Ex-CEO of China Sky to pay civil penalty of S$2.5m, give up 10% of shareholding
FORMER chief executive of China Sky Chemical Fibre, Huang Zhong Xuan, will pay a civil penalty of S$2.5 million and surrender 10 per cent of his shareholding in China Sky under a settlement agreement with the Monetary Authority of Singapore (MAS).
The civil penalty of S$2.5 million is meted out after Mr Huang admitted to making misleading public disclosures and failing to make the required disclosures to the market, thereby contravening the Securities and Futures Act (SFA), the MAS said on Thursday.
This sum will be paid from the US$3.7 million in Mr Huang's Singapore bank account. The surrender or cancellation of Mr Huang's shares will increase the net asset value per share for existing China Sky shareholders.
"The offer by Huang to surrender 10 per cent of his shareholdings in China Sky is the first negotiated settlement of its kind, directly benefitting existing shareholders of China Sky," said MAS assistant managing director (Capital Markets), Lee Boon Ngiap.
"We will continue to work closely with other statutory agencies to enforce the law against those who commit offences in our securities markets, whether they are based in Singapore or overseas."
According to the MAS, the offer is expected to be approved by China Sky's board of directors. Mr Huang has also undertaken not to assume the role of a company director or be involved in the management of any Singapore-listed entity for three years.
Mr Huang's "misleading disclosures" were related to China Sky's purchase and subsequent aborted acquisition of a piece of land in Fujian, China, which contravened Section 199(c) of the SFA.
Those disclosures incorrectly depicted the transaction counterparty as an independent third party when it was a related company, and provided a false reason for the delay in the transfer of the land use rights to China Sky's subsidiary, MAS said.
Mr Huang has also admitted to contravening Section 203 of the SFA in China Sky's failure to make prompt and proper disclosure to the market concerning the Fujian land acquisition.
The Commercial Affairs Department (CAD) commenced investigations in February 2012 and subsequently, in consultation with MAS and the Attorney General's Chambers, agreed to discontinue criminal investigations so that the civil penalty settlement could take place.