SGX questions trading share increase of two companies

Possible breach of rule 703.

On January 3, Aussino Group Ltd. and Asiamedic Limited responded to queries from the Singapore Exchange Securities Trading Limited regarding a substantial increase in the price and volume of the Company’s shares.

SGX-ST questioned the companies whether or not they were aware of any information not previously announced concerning them and their subsidiaries or associated companies which, if known, might explain the trading; any other possible explanation for the trading; and if they confirm, that to the best of their knowledge and understanding, they are in compliance with the listing rules and, in particular Listing Rule 703.

Both Aussino and Asiamedic denied any information concerning them or their associates and subsidiaries which might explain the increase in their trading and subsequently confirmed their company's compliance with the corporate finance and securities regulations particualrly rule 703.

Rule 703 requires a listed company to keep its shareholders and the SGX informed of any material information relating to the group’s activities in order to avoid the establishment of a false market in its securities or that might be price-sensitive.

The continuous disclosure requirements in the listing rules are given statutory backing by Section 203 of the Securities and Futures Act. Under this section, non-disclosure attracts both civil and criminal liability, depending on the state of mind of the disclosing entity.

A corporation may be fined up to twice the maximum amount prescribed for the relevant offence (i.e. S$500,000). In addition, where a corporation or unincorporated association is guilty of an offence under the Securities and Futures Act, any director, executive officer, secretary or similar officer of the corporation or unincorporated association who was knowingly concerned in or party to the commission of the offence shall also be guilty of that offence.