TWO former senior employees of UOB Kay Hian Private Limited (UOBKH) were charged on Wednesday for allegedly lying to the Monetary Authority of Singapore (MAS) in relation to reports on a then Catalist aspirant. Lan Kang Ming, 38, and Wee Toon Lee, 34, each face three charges of providing MAS with false information in October 2018 in relation to due diligence reports on an unidentified company applying to list on the Catalist board of the Singapore Exchange. MAS said in a media statement on Wednesday that it was performing an onsite inspection of UOBKH between June and August 2018, to assess the latter's controls, policies and procedures in relation to its role as an issue manager for Initial Public Offering (IPOs). During the examination, Lan and Wee were said to have provided different versions of a due diligence report relating to background checks on a company applying to be listed on the Catalist board of the Singapore Exchange. UOBKH had acted as the issue manager
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Lynette Khoo
13 February 2015
Former chief executive of beleaguered 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 was meted out after he admitted to making misleading public disclosures and failing to make the required disclosures to the market, thereby breaching the Securities and Futures Act (SFA), the MAS said on Thursday.
The S$2.5 million penalty will be paid from the US$3.7 million in his Singapore bank account, which was frozen under a High Court injunction that MAS obtained in 2013. The surrender or cancellation of his shares will raise the net asset value per share for existing China Sky shareholders.
MAS assistant managing director for capital markets Lee Boon Ngiap said: “The offer by Huang to surrender 10 per cent of his shareholdings in China Sky is the first negotiated settlement of its kind, directly benefiting existing shareholders of China Sky. 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.”
The MAS said 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.
Separately, the Singapore Exchange (SGX) said it is reviewing the roles of the other directors on China Sky’s board and those of its key executive officers who were holding appointments at the time relevant to the breaches of the listing rules noted by the special auditor of China Sky.
“SGX will take further action that it deems necessary,” it said on Thursday. The Exchange will allow trading in China Sky shares to resume once the company complies with conditions imposed by SGX.
China Sky’s “misleading disclosures” from 2006 to 2011 that breached Section 199(c) of the SFA were related to its announced purchase of a piece of land in Fujian, China, and its subsequent abortion of the deal.
The 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 through China Sky’s failure to make prompt and proper disclosure to the market concerning the Fujian land acquisition, which could have had a material effect on the price or value of its securities.
The Commercial Affairs Department (CAD) opened an investigation in February 2012; later on, in consultation with MAS and the Attorney-General’s Chambers, it agreed to discontinue the criminal probe so that a civil-penalty settlement could take place.
The civil-penalty regime came into force in 2004 to complement criminal sanctions and provide a nuanced approach to fighting market misconduct. Under Section 232 of the SFA, MAS may enter into agreements with any person for the person to pay a civil penalty for breaching certain SFA provisions - with or without admission of liability.
CAD director Tan Boon Gin said: “Cases like this have jurisdictional issues that make case resolution challenging. This case has come to a successful resolution through close collaboration between MAS, CAD and SGX, as well as assistance rendered by the authorities and regulators in the People’s Republic of China.
“The settlement is a fair and equitable one which is commensurate with the severity of the breaches. It not only ensures that Huang is punished for his misconduct, but his offer to surrender his shares is a remedial measure that will benefit existing China Sky shareholders.”
On Thursday, China Sky said a supplemental agreement between the two men was inked on Tuesday to extend the deadline for completion and to make reference to Mr Huang’s offer to surrender 15.34 million China Sky shares under the civil penalty settlement with MAS.
Mr Zheng will be deemed to hold 292.18 million China Sky shares upon completion of the share agreement. This share sale is conditional on the confirmation by the Securities Industry Council that it will not trigger a mandatory offer, the Fujian-based company said.