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 CAD and MAS investigation into the case.
On 19 November 2019, GHL announced that it had entered into a conditional sale and purchase agreement for the sale of 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 jumped, with 915,600 GHL shares changing hands the next trading day. This was a 58% increase from the meter’s average daily trading volume in the previous month.
Mr Tay was the sole shareholder and director of GSG Capital. GHL approached him as a potential buyer of GreatSolutions on 2 October 2019. As GreatSolutions was loss-making, Mr Tay was of the view that the market would react positively to the news and expected GHL’s share price to rise.
In a 13-day period between October 4, 2019 and November 18, 2019, while in possession of material non-public information regarding 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 breaching the insider trading provision under section 219(2)(a) of the Securities and Futures Act (SFA) and paid MAS the civil penalty without recourse. Mr Tay has also voluntarily undertaken not to be a company director or participate in the management of a company for a period of two years.