MAS acts against insider
trading
THE Monetary Authority of Singapore (MAS) has taken civil
enforcement action against a company executive for insider
trading.
The case is made somewhat unusual as the "inside
information" or non-public material information relates to a deal
overseas and the trades related to a foreign-listed firm.
The case involves Mr Shi Jiangtao, a department manager
in the investment department of China Minmetals Non-ferrous Metals
Company (CMNMC) - the parent firm of Hong Kong-listed Minmetals
Resources - when the contraventions occurred.
MAS said yesterday that Mr Shi was a member of the
project team formed by CMNMC to work on a proposed takeover of
Equinox Minerals, which has shares listed on both Toronto Stock
Exchange (TSX) and Australian Securities Exchange (ASX).
Between March 14 and April 1 last year, while in
possession of non-public materially price sensitive information
related to this acquisition, Mr Shi traded various contracts for
differences (CFDs), which give investors an option to make huge
bets on stock price movements.
He bought 342,000 CFDs relating to Equinox shares,
206,000 relating to Minmetals shares and sold 213,000 CFDs relating
to Minmetals shares. It was only on April 4 that Minmetals
announced its intention to make an all-cash takeover offer to
acquire all outstanding common shares in Equinox at CAD$7 a
share.
The offer price was at a 23 per cent premium to the
closing price of Equinox shares listed on the TSX on April 1. After
the release of the announcement, shares of Equinox - on both the
TSX and ASX - closed at least 28.7 per cent above the closing share
price on April 1. Shares of Minmetals also closed 2.3 per cent
higher.
The trades took place in Mr Shi's personal trading
account and his wife's trading account, opened and maintained with
CMC Markets Singapore. The trades were then cancelled.
The MAS statement said Mr Shi has admitted to
contravening the insider-trading provision and has paid a penalty
of $100,000 to MAS without court action. He has cooperated fully
with MAS in the investigations, MAS added.
Mr Lee Chuan Teck, MAS' assistant managing director
(capital markets) said this case shows MAS' resolve in pursuing
insider-trading perpetrators, including those residing overseas, or
those trading in over-the-counter CFDs. "Individuals should not
think that they can avoid detection by dealing outside Singapore,
even when dealing in over-the-counter products."
ESTHER TEO
Money, The Straits Times, Tuesday September 11 2012, Pg B12