Record $9.6m penalty for insider trading

The biggest penalty ever handed down for insider trading here has been levied against the brother of a prominent businessman.

Lim Oon Cheng will pay a civil penalty of $9.597 million for breaches of the Securities and Futures Act.

The amount includes a separate penalty of $50,000 for false trading.

His niece, Lim Huey Yih, will have to pay $2.241 million, the Monetary Authority of Singapore (MAS) said in a statement yesterday.

The Straits Times understands that Mr Lim is the brother of Lim Oon Kuin, founder of oil trading firm Hin Leong Group.

Mr Lim Oon Kuin was No. 14 on Forbes' list of Singapore's 50 richest people last year. He was reported to have a net worth of about US$2 billion (S$2.6 billion).

Ms Lim, who is senior vice-president of business development at Hin Leong Trading, is his daughter.

Mr Lim Oon Cheng is a director at a number of marine and oil-related companies, according to the Accounting and Corporate Regulatory Authority's (Acra's) database.

Both he and Ms Lim have admitted to committing insider trading. Mr Lim Oon Cheng has also admitted to false trading.

He bought 2.27 million shares in Singapore Petroleum Company (SPC) and 101,000 shares in Keppel Corporation between May 15 and May 22, 2009.

He did so while in possession of price-sensitive and non-public information relating to the acquisition of SPC shares by PetroChina International (Singapore) from Keppel, and PetroChina's mandatory general offer for SPC shares.

Ms Lim bought 892,000 shares in SPC over the same period while also in possession of this price-sensitive, non-public information.

The share acquisition and mandatory general offer were eventually announced on May 24, 2009.

Keppel sold its entire 45.5 per cent stake in SPC to PetroChina for $1.47 billion, which translated to $6.25 per share and was a significant premium over the firm's share price at the time.

PetroChina made a mandatory general offer for the rest of SPC's shares.

Mr Lim Oon Cheng also entered an order on May 19, 2009, to sell 300,000 SPC shares at the intra-day high of $4.39 without any intention to fulfil the order.

This created a false and misleading appearance in the market for SPC shares, MAS said yesterday.

He made a profit of $3.818 million on his insider trades while Ms Lim reaped $896,340.

They could have been made to pay a maximum of three times the amount of the profit gained.

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