SFC commences MMT proceedings over alleged insider dealing in Titan Petrochemicals Group Ltd shares

Hong Kong SFC

The Securities and Futures Commission (SFC) has commenced proceedings in the Market Misconduct Tribunal (MMT) against Mr Augustine Cheong Kai Tjieh, a former senior executive of an affiliate of Titan Petrochemicals Group Limited, and his mother Ms Gan Ser Soon, for alleged insider dealing in Titan shares in 2012.

The SFC alleges that Cheong and Gan knew Titan’s financial position when they sold their Titan shares in January 2012, particularly that Titan and its affiliates would likely default on certain fixed rate senior notes and on the then outstanding bank loans. The financial position of Titan at the time and its affiliates’ likely default on its payment obligations constituted inside information material to Titan’s share price.

The SFC seeks, among other things, orders for Cheong and Gan to disgorge losses they avoided totalling $2,425,174 as a result of their disposal of Titan shares.

The SFC also has instituted parallel proceedings in the Court of First Instance under section 213 of the Securities and Futures Ordinance against Cheong and Gan about their alleged insider dealing in Titan shares. In these proceedings, the SFC seeks an order to restore relevant counterparties to the position in which they were before they had bought shares from Cheong and Gan.

In early December 2012, the Court of First Instance granted an interim order upon the SFC’s application to freeze $13,618,203, which represented the proceeds of Cheong’s sale of Titan shares in January 2012. The interim order was subsequently discharged after Cheong paid the same amount into court on 24 January 2013.

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