MAS penalises Raphael Tham S$336,000 for insider trading of shares on London Stock Exchange

THE Monetary Authority of Singapore (MAS) on Tuesday said it has imposed a civil penalty of S$336,000 on Singaporean Raphael Tham Wai Mun for insider trading in the shares of Auhua Clean Energy PLC (ACE), which is listed on the London Stock Exchange.

Tham who was the non-executive vice-chairman of ACE, has admitted to contravening the Securities and Futures Act, and has paid MAS the penalty without court action.

The civil penalty (see amendment note) represented 2.5 times the losses that Tham had avoided from the sale of his shares. He has also given MAS a voluntary undertaking not to be a company director, or to be involved in the management of a company for two years with effect from June 5, 2019.

Tham is believed to have worked at EDB (Economic Development Board) for several years, and was also the former executive director of mainboard-listed USP Group, which has been placed on the Singapore Exchange's watch list.

Separately, ACE is a Shandong-based environmental tech group specialising in the development of energy-efficient water heating solutions. It provides split solar-powered water heating systems, storage tanks, and solar energy collector panels under the Weiliya and Jinbiao brand names.

In a press statement released on Tuesday, MAS noted that Tham had sold shares in ACE while in possession of "non-public and price-sensitive information" concerning the company.

On June 16, 2015, ACE announced that it was considering a share placement at a substantial price discount to raise about £1.5 million (S$2.6 million). Following the announcement, the price of ACE shares fell by 45 per cent to close at 7.75 pence.

Three days later, the company announced that it had placed out 38 million shares, representing 30 per cent of the enlarged share capital, to raise about £1.7 million at 4.5 pence per share. The placement price represented a 44 per cent discount from the counter's closing price on the previous day. The price of ACE shares fell by another 30 per cent to close at 5.625 pence after the second announcement.

MAS noted that Tham, who was based in Singapore at the time, had used an investment holding company, Foxtrox Holdings, to sell some 569,745 ACE shares on June 12, 2015, while he was in possession of the non-public and price-sensitive information concerning the share placement.

Tham also held authority over Foxtrox's trading account when the trades took place, and the share sale allowed Foxtrox and Tham to avoid a loss of £76,203, or S$134,186, MAS said.

The authority added that it was referred to the case by the Financial Conduct Authority (FCA) of the United Kingdom, which provided assistance in the investigation.

Said Loo Siew Yee, MAS's assistant managing director of policy, payments & financial crime: "The civil penalty action against Mr Tham, a Singaporean who engaged in insider dealing of shares listed in the United Kingdom, reflects our commitment to pursue offenders who commit market misconduct, regardless of whether the securities are listed in Singapore or overseas.

"The successful action is a result of the close cooperation and information sharing arrangements MAS has with foreign regulators like the FCA, to help fight financial crimes that transcend borders."

Amendment note: An earlier version of the story incorrectly stated that Mr Tham was fined. MAS has since clarified that Mr Tham was "penalised" instead as a civil penalty is not a criminal action, and does not attract criminal sanctions. The article above has been amended to reflect this change.