SINGAPORE Trends and Developments Contributed by: Sreenivasan Narayanan SC, Jason Lim and Palaniappan Sundararaj, Sreenivasan Chambers LLC
upon a plea of guilt in respect of Hyflux’s intention - al non-disclosure of material information relating to the Tuaspring project. Mr Mitta was sentenced to a financial penalty of SGD90,000. Hyflux’s collapse demonstrated that even independent directors bear personal criminal liability where they fail to exercise proper oversight over disclosure deci - sions. Proceedings are currently continuing in rela - tion to executive and non-executive directors who have claimed trial to various charges. • Although Madhavan Peter v PP [2012] 4 SLR 613 is an older case, it was and is the landmark decision being cited and relied upon in current matters. The case is instructive in its detailed discussion of what constitutes materiality in the context of both non- disclosure and misleading disclosure charges. • In the Swiber Holdings case, the former CEO was sentenced to a fine of SGD310,000 for, amongst other things, procuring a false announcement that Swiber had secured a USD710 million project in West Africa when, in reality, only a conditional letter of intent for preliminary engineering work worth approximately USD2 million had been signed. The former CEO was also convicted of insider trading after advising his wife to sell their joint holdings in Swiber debentures ahead of the disclosure of the company’s financial difficulties. The former CEO, who was aware of Swiber’s severe financial difficul - ties (including the company’s inability to redeem approximately SGD305 million in debentures) had advised his wife to sell SGD500,000 worth of Swiber debentures ahead of the disclosure of the issues, thereby avoiding a loss of around SGD629,762. The former CEO also failed to dis - close changes in his interest in Swiber debentures, including numerous sales of the debentures. Practical guidance • Directors should err on the side of disclosure in cases where it is not clear whether a piece of information is material. Where there is any doubt as to what the disclosure obligations are, prompt legal advice should be sought. Board discussions on materiality should be robust, thorough and well-documented: detailed minutes recording the information considered, the views expressed, and the reasons for the ultimate decision are essential.
• Independent directors are not immune from liabil - ity; ie passive reliance on management or external advisers is not a defence. Each director bears a personal responsibility to satisfy themselves that disclosure obligations are being met. Market manipulation offences (Section 197 of the SFA) Whilst non-disclosure cases focus on what directors fail to disclose, market manipulation offences under Section 197 of the SFA address what participants actively do to distort the market. Key observations include the following. • Section 197 (1)(b) of the SFA provides that a per - son must not do any thing, cause any thing to be done or engage in any course of conduct if any of the person’s purposes is to create a false or mis - leading appearance with respect to the market for, or the price of, any capital markets product traded on an organised market. • The statute does not require the sole purpose of the act to be the creation of a false or misleading appearance; even if it was merely one of multiple purposes, that would be sufficient for the court to find guilt. • Further, an offence can be made out even if the act done did not actually result in a distortion to the market. Notable cases include the following. • The starting point for any discussion of market manipulation in Singapore must be the landmark prosecution of Soh Chee Wen, which culminated in the Court of Appeal’s decision in Soh Chee Wen v Public Prosecutor and another appeal [2025] 2 SLR 176 and Soh Chee Wen v Public Prosecutor and another appeal [2026] 1 SLR 214. This was the most significant market manipulation pros - ecution in Singapore’s history, spanning over 200 days of trial and many years of investigation. The accused persons were found to have conspired to manipulate the share prices of three listed compa - nies, with the involvement of numerous trading rep - resentatives and account holders at various local and foreign brokerages. Pre-arranged trades were
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