The Monetary Authority of Singapore (MAS) has imposed a civil penalty of S$70,000 on Mr Tay Joo Heng for insider trading in the shares of GS Holdings Limited (GHL). This follows a joint investigation by CAD and MAS into the case.
On 19 November 2019, GHL announced that it had entered into a conditional sale and purchase agreement to sell its wholly owned subsidiary, GreatSolutions Pte Ltd, to GSG Capital Pte Ltd for a consideration of S$2 million. Following the announcement, trading activity in GHL shares spiked, with 915,600 GHL shares changing hands the next trading day. This was a 58% increase from the counter’s average daily traded volume in the one month prior.
Mr Tay was the sole shareholder and director of GSG Capital. He was approached by GHL as a potential buyer of GreatSolutions on 2 October 2019. As GreatSolutions had been loss-making, Mr Tay held the view that the market would react positively to the news and anticipated that GHL’s share price would rise.
Over a period of 13 days between 4 October 2019 and 18 November 2019, while in possession of material non-public information relating to GHL’s intended sale of its loss-making wholly owned subsidiary GreatSolutions, Mr Tay purchased a total of 515,000 GHL shares.
Mr Tay admitted to contravening the insider trading provision under section 219(2)(a) of the Securities and Futures Act (SFA) and has paid MAS the civil penalty without court action. Mr Tay has also given a voluntary undertaking not to be a company director or be involved in the management of a company for a period of two years.
