The MAS and CAD naughty list
In recent months, companies and individuals have made the headlines for offences ranging from insider trading to bribery cases
The CAD and MAS usually jointly investigate market misconduct offences such as insider trading and market manipulation under the Securities and Futures Act (SFA).
In recent months, firms and individuals have made the headlines for offences ranging from insider trading of shares to bribery cases. Here are some of them:
Hiap Hoe, Hotel Grand Central
The chairman of Regency Steel Asia Gui Boon Sui was issued a civil penalty of S$350,000 for conducting false and unauthorised trading of shares in Hiap Hoe and Hotel Grand Central.
Between December 2018 and August 2022, Gui bought shares in the two companies for the purpose of artificially inflating the counters’ closing prices.
Apart from using his own account, Gui had also used two of his employees’ accounts without the authorisation of brokerage firms to carry out the false trades.
Gui artificially inflated the closing prices of Hiap Hoe and Hotel Grand Central shares on 554 days and 56 days, respectively in the recorded period, said MAS and CAD.
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He has since given an undertaking that he will not be a company director or involved in the management of a company, for a period of two years.
JPMorgan Chase Bank
The lender has paid a S$2.4 million civil penalty to MAS for its failure to prevent and detect misconduct by its relationship managers (RMs).
They had reportedly provided clients with “inaccurate or incomplete disclosures”. This resulted in clients being charged spreads above bilaterally agreed rates for 24 over-the-counter bond transactions. The transactions took place between November 2018 and September 2019.
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JPMorgan charges clients a spread over the interbank prices, which were unavailable to clients. As a result, the clients had to rely on the RMs’ representations regarding the prices and spreads, said MAS.
The lender’s RMs were said to have misrepresented the price components in the 24 transactions. They also omitted material information that the spreads charged were above the agreed rates.
Both actions by JPMorgan’s RMs were deemed offences under the SFA.
EuroSports Global
Wong Chow Lin and his trading representative, Gillian Isabel Siow, were charged for false trading of the company’s shares in 2017 and 2018.
Wong had allegedly traded in shares of the luxury car distributor to push up the closing price of its shares on 77 trading days between Feb 24, 2017, and Jan 12, 2018.
He was charged with one count under Section 197(1)(b) of the SFA for engaging in conduct that created a misleading appearance with respect to EuroSports Global share price during this period.
Meanwhile, Siow was charged with one count under Section 197(1)(b) of the SFA for intentionally aiding Wong in false trading.
Nech Capital
A former representative of fund management company Nech Capital was issued a five-year prohibition order by MAS in September for conducting a fraudulent business operation.
Between Jan 4, 2019, and Jul 24, 2020, Pan Qi worked as a trader at Nech Capital, where he was responsible for trading using the company’s trading accounts. Profit earned from the trades were to be entered into a fund managed by the investment company.
Pan had executed trades in several securities counters between the company accounts and those of his relatives. However, his trades were conducted in a manner that profited him at the expense of the company, said MAS.
He was barred from performing any regulatory activity and from taking part in the management, acting as director. He was also not allowed to become a substantial shareholder of any capital markets services firm under the SFA.
Memiontec
The husband-and-wife co-founders of water-treatment company Memiontec are being investigated for a potential offence under Section 201 of the SFA, which relates to the use of manipulative and deceptive devices to defraud. They have been arrested and then released on bail. Soegiharto has surrendered her passport to MAS, while Tay is allowed to travel out of Singapore, subject to prior clearance by MAS.
Investigations are still ongoing, said Memiontec on Monday. Meanwhile, the pair have been deemed suitable by the company’s nominating committee and board to remain as directors.
GS Holdings
Businessman Tay Joo Heng was hit with a civil penalty of S$70,000 by MAS on Jul 1 for insider trading of shares in GS Holdings. He is the sole shareholder and director of GSG Capital, which purchased GS Holdings’ then subsidiary, GreatSolutions, for a consideration of S$2 million.
GS Holdings had reportedly approached Tay to be a potential buyer on Oct 2, 2019. Investigations by CAD and MAS found that between Oct 4 and Nov 18, he bought 515,000 shares of GS Holdings while in possession of material non-public information relating to the group’s intended disposal of GreatSolutions.
The authorities said: “As GreatSolutions had been loss-making, Mr Tay held the view that the market would react positively to the news and anticipated that GS Holdings’ share price would rise.”
Seatrium
The offshore and marine specialist said in June that the MAS and CAD were conducting a joint investigation into offences potentially committed by the company and/or its officers. The suspected offences were related to a decade-old bribery case in Brazil dubbed “Operation Car Wash”. They also fell under the SFA and the Corruption Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act.
Earlier this year, two former Seatrium executives – Wong Weng Sun and Lee Fook Kang – were each slapped with five charges of conspiring to corruptly give gratification worth millions of dollars to officials in Brazil from 2009 to 2014. The money was meant to advance the business interests of the company’s subsidiaries there.
Cordlife
In March, four directors and former group CEO Tan Poh Lan of Cordlife were arrested by the CAD and then released on bail.
Subsequently, another director was arrested, but was also released on bail.
The beleaguered cord-blood bank said the arrests were related to alleged breaches-of-disclosure obligations by Cordlife over the matter of irregular temperatures in a certain cryogenic storage tank.
The latest news is that the company sank into a loss of S$12.4 million for the first half ended Jun 30, from a year-on-year net profit of S$2.2 million. Its revenue fell 67.5 per cent to S$9.2 million, from S$28.3 million in the previous corresponding period, largely due to the suspension of the group’s Singapore activities.
Cordlife also announced that it has lost its accreditation with the Association for the Advancement of Blood & Biotherapies.
KOP
Tay Ming Hin, the 17th largest shareholder of Catalist-listed KOP, was sentenced to four weeks’ jail for false trading in the company’s shares.
Between Aug 7, 2018 and Aug 21, 2019, he had three margin-trading accounts, with KOP shares forming the bulk of the collateral in them.
As KOP’s share price was on a downward trend during the period, he bought shares to push up the price to avoid margin calls being triggered in those accounts.
These purchases caused the closing price of the company’s shares to be “higher than it would otherwise have been” on 79 occasions, said MAS.
KTL Global
The former chief executive and executive director of KTL Global, Tan Kheng Yeow, has begun serving his eight-month jail sentence for false trading of the company’s shares. The High Court dismissed his appeal in July.
Tan was sentenced to imprisonment by the State Courts on Jan 23 for conspiring with another individual, Tang Boon Hai, to create a false appearance of active trading in KTL shares between 2014 and 2015 to drive up the share price.
This was done as the six-month volume-weighted average price (VWAP) of KTL’s shares was below the minimum price of S$0.20 set by the Singapore Exchange in 2014, said MAS and the Singapore Police Force (SPF) in a joint statement on Aug 28.
Under the requirement, a mainboard-listed company’s VWAP over a six-month period cannot fall below S$0.20. Issuers that fail to comply may be delisted.
MAS and SPF also noted that Tan held significant quantities of KTL shares and knew that his net worth would increase along with the share price.
Koyo International
Former representative of RHB Securities, Chong Yew Mun Alan, was served a five-year prohibition order by the MAS upon his conviction last May for false trading of Koyo International’s shares.
Between December 2015 and January 2016, he abetted another individual, Lin Eng Jue, in a scheme to manipulate Koyo’s shares to attract a buyer to acquire the company in a reverse takeover.
On Lin’s instructions, Chong carried out trades of Koyo’s shares in 15 trading accounts and used the login credentials of account holders to trade on various brokerages’ online trading platforms.
Koyo’s share price jumped 150 per cent to S$0.40 on Jan 14, 2016, from S$0.16 on Aug 12, 2014. It subsequently fell to S$0.056 after the Singapore Exchange Securities Trading issued an alert. Trading curbs were also imposed by several brokerages.
Following the crash, account holders suffered losses of about S$3.3 million, of which some S$1.1 million were borne by the brokerages and remisiers.
No Signboard
Former executive chairman and chief executive Lim Yong Sim was convicted and sentenced to a fine of S$420,000, after pleading guilty to three charges of false trading under the SFA.
In 2018, Lim purchased 4.3 million No Signboard shares, using GuGong’s account to falsely inflate the company’s share price. This led to No Signboard’s share price rising by 27 per cent from S$0.154 to S$0.196.
After the company posted a loss for its financial year 2018, No Signboard’s share price dipped. To cushion the fall, Lim bought more shares. In total, he purchased 3.5 million of the company’s shares between Nov 30, 2018, and Jan 11, 2019, through GuGong’s trading account.
GuGong was a controlling shareholder of No Signboard.
On Jan 31, 2019, Lim also used the company’s corporate share buyback account to buy more shares. This was done to buffer the further decline in the company’s share price one day before it posted a loss for the first quarter of FY2019.
Since Jul 2 this year, the company has been renamed Bromat Holdings on the bourse’s Catalist board.
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