MAS fines investor in first civil penalty for not disclosing shareholding interests

THE Monetary Authority of Singapore (MAS) has slapped a S$200,000 civil penalty on Lim Soon Fang, an investor in Catalist-listed China Real Estate Group, then known as Asia-Pacific Strategic Investments Limited (ASIL), for not disclosing changes in, and providing false information regarding his shareholding in the property developer.

This is the first such action by the authority for breaches of shareholding disclosure requirements under Part VII of the Securities and Futures Act since the civil penalty regime was extended in November 2012, MAS said in a statement on Friday.

Mr Lim became a substantial shareholder of ASIL in October 2013 and traded actively in the company's shares between October 2013 and October 2014, resulting in changes in his shareholding interests that were required to be disclosed under the Act.

His trades had on multiple occasions also led to him ceasing to be or becoming a substantial shareholder of ASIL, which are events that must be disclosed, MAS said.

He failed to notify ASIL of changes in his shareholding interest on 32 occasions. On four occasions, he did not inform ASIL that he had become a substantial shareholder. He also did not disclose to ASIL that he was no longer a substantial shareholder on five occasions.

Mr Lim also provided false information to ASIL regarding his transaction volume in the company's shares and shareholding in the company on three occasions.

MAS said Mr Lim has admitted that he had been reckless in breaching his disclosure obligations under the Act, and in furnishing false information regarding his shareholding in ASIL to the company.

Loo Siew Yee, MAS assistant managing director (policy, payments and financial crime), said the timely and accurate disclosure of a substantial shareholder's interest in listed companies enables investors to be aware of any changes in control at the company. It also enables investors to make informed decisions when trading in a company's shares.

"MAS will take appropriate action against any person who disregards these disclosure obligations," she added.

The civil penalty regime was extended in November 2012 to include disclosure of interest breaches to allow MAS to take civil penalty action against flagrant breaches of the disclosure requirements.

A financial penalty of between S$50,000 and S$2 million may be imposed for a breach in disclosure obligations.

A civil penalty is not a criminal action and does not attract criminal sanctions.

ASIL changed its name to China Real Estate Group in 2018. Shares of China Real Estate Group last traded at S$0.002 on Thursday.