Former chief executive of suspended S-chip China Sky to pay $2.5 million fine

The former chief executive of suspended S-chip China Sky, Mr Huang Zhong Xuan, has agreed to pay a civil penalty of $2.5 million for making misleading statements and failing to disclose information, the authorities said in a statement on Thursda
The former chief executive of suspended S-chip China Sky, Mr Huang Zhong Xuan, has agreed to pay a civil penalty of $2.5 million for making misleading statements and failing to disclose information, the authorities said in a statement on Thursday. -- PHOTO: CHINA SKY CHEMICAL FIBRE ANNUAL REPORT

SINGAPORE - The former chief executive of suspended S-chip China Sky has agreed to pay a civil penalty of $2.5 million for making misleading statements and failing to disclose information, the authorities said in a statement on Thursday.

The money will come out of his frozen Singapore bank account, which contains US$3.7 million, they said.

Mr Huang Zhong Xuan also has to offer to surrender a small part of his stake in China Sky, the Commercial Affairs Department (CAD) and Monetary Authority of Singapore (MAS) said in a joint statement. He cannot work as a company director or manage any Singapore-listed company for three years.

These are part of a settlement agreement that Mr Huang has made with the MAS.

He has admitted that he had violated the Securities and Futures Act, which governs capital markets activity, the authorities said.

They noted that he "has admitted to making misleading statements" about China Sky's purchase, which was later aborted, of a piece of land in Fujian, China.

He also failed to make "prompt and proper" disclosures to the market about the Fujian land acquisition, they added.

Mr Lee Boon Ngiap, assistant managing director of capital markets at MAS, said in the statement that Mr Huang's offer to surrender about 15.4 million shares in China Sky was the "first negotiated settlement of its kind, directly benefiting existing shareholders of China Sky".

The CAD said it had begun investigating Mr Huang in February 2012 but later discontinued their probe so that the civil penalty settlement could take place.

"We assure market participants that we will explore all viable avenues with the relevant agencies, including our overseas counterparts, to make wrongdoers account for what they have done," said CAD director Tan Boon Gin.