Updated: 04/02/2014 00:22 | By Channel NewsAsia
Ex-staff of Jade Tech fined nearly S$3m for insider trading
SINGAPORE: An ex-staff of Jade Technologies has been fined nearly S$3 million by the Monetary Authority of Singapore (MAS) under the Securities and Futures Act (SFA) for insider trading and employing deceptive devices in share trading.
This is the largest fine imposed on an individual under the civil penalty regime since it was introduced 10 years ago.
Norman Phua Chun Han committed the offences between November 2007 and April 2008, when he was an assistant to Anthony Soh Guan Cheow, then the chief executive of Catalist-listed Jade Technologies, a semi-conductor engineering services firm.
MAS said in a statement on Tuesday that a fine of S$2,965,415 had been imposed on Mr Phua.
This comprises a civil penalty amount of S$2,865,415, for insider trading, and S$100,000 for using manipulative and deceptive devices in connection with the purchase and sale of securities.
On 18 February 2008, OCBC Bank announced that Mr Soh's investment vehicle, Asia Pacific Links (APL), intended to make a voluntary conditional cash offer for all the issued ordinary shares of Jade at 22.5 cents per share and that APL, together with Mr Soh, a doctor-turned-venture capitalist, held about 46.5 per cent of Jade.
The offer valued Jade at about S$218 million.
After the release of the takeover announcement, Jade shares closed at 22 cents, or about 13 percent above their last traded price before the announcement.
MAS said that, while in possession of non-public and materially price-sensitive information concerning the proposed takeover of Jade, Mr Phua used securities trading accounts maintained by a Mr Ng Yu Jin with OCBC Securities on three occasions to buy a total of 2.65 million shares of Jade for his own benefit.
Mr Phua made a profit of more than S$50,000 from these trades.
On 5 April 2008, Jade announced that APL had written to the Securities Industries Council for consent to withdraw the takeover offer -- and that the offer was withdrawn with immediate effect.
After the release of the withdrawal announcement, Jade shares closed at 6.5 cents, a 70 per cent drop from the last traded price prior to the announcement.
MAS said that, again, while in possession of non-public and materially price-sensitive information concerning the withdrawal of the offer, Mr Phua used Mr Ng's accounts on two occasions to sell about 7.1 million shares in Jade, and avoided a loss of about S$1.1 million.
By using Mr Ng's trading accounts, Mr Phua also deceived OCBC Securities into believing that the accounts were opened and operated for the benefit of Mr Ng, in contravention of the SFA.
Mr Ng has separately admitted to contravening the SFA and paid a fine of S$50,000 to the MAS without criminal action.
The failed takeover in 2008 also led to a legal battle in the High Court between Mr Soh and OCBC Bank, which was the financial adviser to Jade.
The bank had resigned as advisor after a series of events caused it to "question the integrity of the representations received".
Ruling in OCBC's favour in October 2010, Justice Lai Siu Chiu said in her judgement that Mr Soh and APL had "repeatedly misrepresented" APL's financial resources and level of shareholding in Jade "throughout their interactions with legal and financial advisers". - CNA/al
