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China Sky Ex-CEO to pay 2.5 million SG dollars civil penalty

Xinhua, February 12, 2015 Adjust font size:

Huang Zhongxuan, the former chief executive officer (CEO) of China Sky Chemical Fibre Co., Ltd (China Sky), has agreed to pay a civil penalty of 2.5 million Singapore dollars (1.88 million U.S. dollars) for making misleading statements and failing to disclose material information to the market thereby contravening the Securities and Futures Act (SFA), the Monetary Authority of Singapore (MAS) said in a press release on Thursday.

Under the settlement agreement with the MAS, Huang will also make an offer to surrender 10 percent of his shareholding in China Sky, equivalent to 15,416,121 shares. Huang can not assume the role of a company director or be involved in the management of any entity listed on the Singapore Exchange (SGX) for three years.

The Commercial Affairs Department (CAD) of Singapore commenced investigations in February 2012 and subsequently in consultation with MAS and the Attorney General's Chambers, agreed to discontinue criminal investigations so that the civil penalty settlement could take place.

During the investigation, Huang admitted that he has made misleading statements to the market relating to China Sky's purchase and subsequent return of a plot of land in southeast China's Fujian province, which is in contravention of Section 199( c) of the Securities and Futures Act (SFA).

The statements include misleading disclosures relating to the use of the Fujian Land, incorrectly depicting the transaction counterparty as an independent third party, and providing a false reason for the delay in the transfer of the land use rights to China Sky's subsidiary.

Huang has also admitted to contravening Section 203 of the SFA relating to China Sky's failure to make prompt and proper disclosure to the market in relation to the Fujian Land acquisition.

"MAS takes a strong stance against market misconduct and spares no effort in investigating possible transgressions," Said MAS' Assistant Managing Director (Capital Markets), Lee Boon Ngiap. "We will continue to work closely with other statutory agencies to enforce the law against those who commit offences in our securities markets, whether they are based in Singapore or overseas." Endi