COMPANIES AND SECURITIES AND FUTURES ACTS (Compliance with public disclosure)

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COMPANIES AND SECURITIES AND FUTURES ACTS:

(Compliance with public disclosure): 6.

Mr Steve Chia Kiah Hong asked the Deputy Prime Minister and Minister for Finance, in view of the Goodwood Park Hotel's substantial shareholders disclosure reporting fiasco (a) whose responsibility is it to ensure compliance with the Companies Act and the Securities and Futures Act concerning public disclosure; and (b) how do the authorities intend to detect non-compliance.

Mr Lim Hng Kiang (for the Deputy Prime Minister and Minister for Finance): Mr Speaker, Sir, under the Companies Act, it is the responsibility of

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a substantial shareholder of a listed company to disclose his shareholding to the company, within two business days after becoming a substantial shareholder or when his shareholding changes. Failure to comply with the requirement is an offence, with a fine of up to $5,000 on conviction, and a further fine of $500 for each day the offence continues after conviction.

In addition to reporting to the company, it is also a requirement under the Securities and Futures Act (SFA) for the substantial shareholder to report his shareholding to the SGX. Failure to comply can attract a fine of up to $25,000 and a further fine of $2,500 for each day or part of the day the offence continues after conviction.

The Accounting and Corporate Regulatory Authority (ACRA) and MAS investigate cases of failure or delays in reporting substantial shareholdings under the Companies Act and SFA respectively. Where a listed company suspects that there has been non-disclosure of substantial shareholdings, it can enquire further into the beneficial ownership of the shares held by any shareholder and bring it to the attention of ACRA and MAS. Suspected breaches are either investigated by the agency concerned or referred to the Commercial Affairs Department (CAD) of the Police Force for further investigation.

CAD is currently investigating the under-disclosure of substantial shareholdings in several listed companies involving the late Mr Khoo Teck Puat. Adequate, accurate and timely disclosure is key to a disclosure-based regulatory regime and any non-compliance will be investigated thoroughly.

Mr Steve Chia Kiah Hong: Sir, from the Minister's answer, does it mean that not all non-compliance would be known?

If the substantial shareholder did not actually make a disclosure, it would not

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be known - am I right to say that - and there is no way to know.

Mr Lim Hng Kiang: As I explained in my answer, the onus for disclosure is upon the shareholder. If he fails to disclose, then he faces a conviction and a fine.

Mr Steve Chia Kiah Hong: So, does that mean that there is no way to detect non-compliance?

Mr Lim Hng Kiang: Mr Speaker, Sir, this is the whole basis of a disclosure-based regulatory regime. The onus is on the person to disclose. Of course, the regulatory agencies have other means of getting feedback and sources of information. But, no, we do not actively sit out there and check on the shareholding of everybody. We leave it to the shareholders to disclose their shareholdings if they cross the bar of what is deemed as a substantial shareholder.