On 4 July 2024, the former Chief Executive Officer (“CEO”), Group President and executive director of Swiber Holdings Limited (“Swiber”), Yeo Chee Neng (“Yeo”) was convicted of, and sentenced to fines amounting to $310,000 for four counts of offences under the Securities and Futures Act (“SFA”):
- $100,000 fine imposed for the charge under Section 199(b)(ii) r/w Section 331(1) SFA for his neglect in connection with Swiber’s false statement relating to a US$710 million project award;
- $200,000 fine imposed for the charge under Section 218(2)(b) SFA for procuring his wife to sell their joint holdings in Swiber debentures while in possession of non-public and material information relating to Swiber’s financial difficulties; and
- $5,000 fine imposed for each of the two charges under Section 133(1)(g) SFA for failing to disclose changes in his interest in Swiber debentures.
Yeo is also disqualified from being a director of any company or directly or indirectly taking part in the management of any company for a period of five years.
Five other charges under the SFA, which include insider trading and Yeo’s role in Swiber’s reckless failure to notify Singapore Exchange (“SGX”) of information required to be disclosed, were taken into consideration for the purpose of sentencing.
Swiber’s false statement
On 15 December 2014, Swiber released an announcement stating that it had secured a US$710 million project award to provide Engineering, Procurement, Construction, Installation and Commissioning (“EPCIC”) services for an offshore field development project in West Africa (“West African Project”).
However, investigations revealed that at the material time, Swiber’s subsidiary, Swiber Offshore Construction Pte Ltd (“SOC”) had only entered into a Letter of Intent (“LOI”) to provide Pre-Front End Engineering Design (“Pre-FEED”), Front-End Engineering Design (“FEED”) engineering studies and EPCIC services for the West African Project.
The LOI merely stated that the contract price was “estimated to be approximately” US$710 million and was subject to review after the conclusion of the FEED study and on finalisation of the field development plan. SOC was only authorised to spend up to US$2 million to carry out a subset of the work, namely Pre-FEED and FEED work. The announcement was thus false in a material particular as it had the effect of significantly overstating Swiber’s business prospects and was likely to induce the purchase of Swiber’s securities by other persons.
Yeo, then a non-executive director of Swiber, admitted that he approved Swiber’s announcement despite knowing the LOI and its terms, which a reasonable person in his position ought reasonably to have known was false in a material particular.
Insider trading
Yeo assumed the role of Deputy Group CEO in 2015 and later became Swiber’s CEO and Group President from 20 June 2016. In these roles, Yeo was privy to non-public and material information relating to Swiber’s financial difficulties owing to a slowdown in the oil and gas sector in early 2016.
Investigations revealed that Swiber was due to redeem debentures worth S$305 million in June, July and October 2016 and was negotiating with third parties to raise funds to fulfil the redemptions, amongst other operating and financial commitments. Yeo believed that if these fund-raising exercises failed, Swiber would go into default. He had also directly communicated information relating to Swiber’s financial situation to his wife on multiple occasions.
By 29 June 2016, Yeo knew that Swiber had not secured such funds and this information would reasonably be expected to have a material effect on Swiber’s securities. While in possession of this information, Yeo instructed his wife to sell Swiber debentures that were held in their joint account. Yeo’s wife placed an order on 29 June 2016 to sell Swiber debentures with a face value of S$500,000, and eventually liquidated half of this position on 5 July 2016.
On 27 July 2016, Swiber filed an application to wind up the company. Two days later, the winding-up application was withdrawn, and Swiber was placed under interim judicial management instead. Thereafter, Swiber defaulted on the outstanding debentures.
In respect of his insider trading misconduct, Yeo avoided losses of S$629,762. Before he was sentenced, he voluntarily disgorged this sum in full and it has since been forfeited to the State.
Disclosure breaches in relation to Yeo’s interest in Swiber debentures
On top of the sale on 5 July 2016, Yeo’s wife also sold Swiber debentures held in their joint account with a face value of S$500,000 between 28 and 29 June 2016, and a further S$250,000 on 12 July 2016.
Yeo knew about these sales on or about 29 June 2016 and 13 July 2016 respectively, and that he and his wife held further Swiber debentures with a face value of S$500,000 in their joint accounts as of 13 July 2016. Despite this, he failed to notify Swiber in writing of the changes in his interest in the Swiber debentures, as required of him as a director and CEO of Swiber.
Other co-accused persons
Between February and May 2024, seven other former directors of Swiber were each convicted on one count of Section 199(b)(ii) r/w Section 331 SFA for their neglect in connection to Swiber’s false announcement on the West African Project. They were sentenced to fines ranging from $10,000 to $100,000, with details of the seven directors listed below.
All of them were also disqualified from being a director of any company or directly or indirectly taking part in the management of any company for a period of five years.
SINGAPORE POLICE FORCE
06 July 2024 @ 10:00 AM