Civil Penalty Action Taken Against Tay Joo Heng for Insider Trading

Joint Statement by
Commercial Affairs Department, Singapore Police Force (CAD) &
Monetary Authority of Singapore (MAS)

Singapore, 1 July 2024… 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.

2. 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 (GreatSolutions), to GSG Capital Pte Ltd (GSG Capital) 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.

3. 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.

4. 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.

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Additional Information

(A) The civil penalty regime

A civil penalty action is not a criminal action and does not attract criminal sanctions. The civil penalty regime, designed to complement criminal sanctions and provide a nuanced approach to combat market misconduct, became operational at the beginning of 2004.

Under section 232 of the SFA, MAS may enter into an agreement with any person for that person to pay, with or without admission of liability, a civil penalty for contravening any provision of Part 12 of the SFA. The civil penalty may be up to three times the amount of the profit gained or loss avoided by that person as a result of the contravention, subject to a minimum of $50,000 (if the person is not a corporation) or $100,000 (if the person is a corporation).

(B) Section 219(2)(a) of the SFA

Section 219(2)(a) prohibits a person who is not connected to any corporation but is in possession of materially price-sensitive information, which he knows is materially price-sensitive and not generally available, and the information would have a material effect on the price or value of securities, from subscribing for, purchasing or selling, or entering into an agreement to subscribe for, purchase or sell these securities.

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