Investor hit with $200k penalty for breaching disclosure rules

An investor who breached disclosure rules regarding his holdings in a Catalist-listed firm has been hit with a civil penalty of $200,000.

It is the first such action for contravening shareholding disclosure obligations under the Securities and Futures Act since the civil penalty regime was tightened in November 2012.

Mr Lim Soon Fang became a substantial shareholder - one holding at least 5 per cent of a firm's voting shares - of property developer Asia-Pacific Strategic Investments in October 2013, and traded actively in its stock for a year.

Several of Mr Lim's trades either led to him becoming a substantial shareholder of the company or left him below that level, but both events must be disclosed under the Securities and Futures Act, the Monetary Authority of Singapore (MAS) said yesterday.

He also provided false information to the firm regarding his transaction volume in the stock and his shareholding on three occasions.

Mr Lim, who has paid the penalty, admitted that he had been reckless in breaching his disclosure obligations and in furnishing false information to Asia-Pacific Strategic Investments regarding his shareholding, said the MAS.

Ms Loo Siew Yee, MAS assistant managing director (policy, payments and financial crime), said: "It is important for substantial shareholders to make timely and accurate disclosure of their interests in listed companies. This enables investors to be aware of changes in the control of a company and make informed decisions when trading in the shares."

Asia-Pacific Strategic Investments changed its name to China Real Estate Group in August 2018.

The civil penalty regime, which is designed to complement criminal sanctions, became operational at the start of 2004. It was expanded to include disclosure-of-interest breaches in November 2012 to allow the MAS to take action against flagrant breaches of the disclosure requirements. The penalty in such cases can range from $50,000 to $2 million.