27-5-023 (SINGAPORE) Three family members have been fined significant sums, ranging from S$100,000 to S$150,000, for their involvement in insider trading offenses related to the acquisition of DuluxGroup by Nippon Paint.
Shae Toh Hock, aged 62, held the position of senior vice president of corporate planning and development at a subsidiary of Nippon Paint Holdings in Singapore during the listing of DuluxGroup on the Australian Securities Exchange, according to the Singapore Police Force.
As part of an acquisition plan, Shae and his team were responsible for conducting due diligence on paint manufacturer DuluxGroup. Due to his position, Shae had prior knowledge of Nippon Paint Holdings’ intention to acquire DuluxGroup and make an offer at a premium of approximately 30% over the company’s existing share price.
On April 7, 2019, Shae shared this non-public information with his sister, Shae Hung Yee, and her husband, Siew Boon Liong. The duo was aware that the proposed acquisition had not yet been publicly disclosed and that it could have a significant impact on the price of DuluxGroup’s shares once made public, according to the police.
The following day, Siew, aged 62, opened a new securities trading account to purchase Australian shares. On April 12, 2019, he and his wife jointly acquired 40,000 shares of DuluxGroup.
On April 17, 2019, Nippon Paint Holdings and DuluxGroup officially announced the proposed acquisition. The police revealed that on the day of the announcement, trading volume for DuluxGroup shares saw a significant increase of 865% compared to the average daily volume in the preceding month. Additionally, DuluxGroup’s share price rose by 27.1% from the previous day’s closing price.
Following the announcement, Shae Hung Yee and Siew sold all 40,000 shares of DuluxGroup between April 17 and May 9, 2019, resulting in a profit of over S$75,000.
On Friday, Shae Toh Hock was convicted of sharing non-public and material information with his sister. He pleaded guilty and was fined S$100,000.
Shae Hung Yee, aged 59, and Siew were both convicted of purchasing DuluxGroup shares while in possession of insider information prior to the official acquisition announcement. They also pleaded guilty and were each fined S$150,000.
