Man Hit with S$350,000 Fine for Manipulating Stock Prices of Hiap Hoe and Hotel Grand Central

In a significant enforcement action, the Monetary Authority of Singapore (MAS) has slapped a hefty civil fine of S$350,000 (approximately US$255,000) on a local businessman for engaging in false trading activities that artificially inflated the stock prices of two companies, Hiap Hoe Limited (HHL) and Hotel Grand Central Limited (HGC).

The penalty follows a thorough investigation conducted by the Commercial Affairs Department in partnership with MAS, spurred by a referral from Singapore Exchange Regulation (SGX RegCo). The joint investigation unveiled a pattern of manipulation taking place between December 2018 and August 2022, where Gui Boon Sui, also known as Goi Chon Yan, orchestrated trades with the intention of inflating the closing prices of the stocks.

Mr. Gui is also the chairman of Regency Steel Asia, a subsidiary of the Japanese conglomerate Mitsui, indicating a level of influence in the steel and construction sector. Notably, he holds a substantial stake in Hiap Hoe, with recent reports showing he possesses 0.22% (1,041,600 shares) directly, and a deemed interest of 5.5% (25,876,950 shares).

The MAS disclosed that Mr. Gui's manipulative trading occurred on an astonishing 554 days for HHL and 56 days for HGC. His actions extended beyond his own trading accounts, utilizing accounts belonging to two employees for unauthorized transactions aimed at inflating stock values.

Hiap Hoe Limited is recognized as a prominent real estate group in the region, while Hotel Grand Central manages a portfolio of hotels and properties across Singapore, Malaysia, Australia, and New Zealand, making this case particularly impactful given the industries involved.

In response to the ruling, Mr. Gui admitted to violating the Securities and Futures Act's regulations surrounding false and unauthorized trading and agreed to settle the civil penalty without the need for court proceedings. As part of the settlement, he has also committed to stepping down from any company directorships or management roles for a period of two years.

It’s essential to note that this civil penalty action is distinct from a criminal charge, indicating that while it addresses serious market misconduct, it does not carry criminal sanctions. The MAS has reinforced its commitment to maintaining market integrity through this civil penalty framework, which has been operational since 2004.

Following the announcement, shares of both Hiap Hoe and Hotel Grand Central closed relatively stable at S$0.56 and S$0.715, respectively, as market participants digested the implications of the regulatory action. This situation emphasizes the ongoing vigilance required in maintaining ethical trading practices within Singapore's vibrant financial market sector.