SINGAPORE: The former managing director of Raffles United Holdings, Teo Teng Beng, was fined S$430,000 for manipulating the market to inflate the company’s share price. Teo was convicted of three charges under the Securities and Futures Act (SFA) after a trial.
Raffles United, which stocks, distributes, and retails bearings and seals, was listed on the Singapore Exchange (SGX) mainboard until December 2019. Prosecutors argued Teo used a trading account in his brother's name and instructed an employee to trade company shares to artificially inflate the price. This action aimed to circumvent an SGX minimum trading price rule introduced in 2016 to curb speculation and manipulation.
During the trial, Teo admitted to placing orders on his brother's behalf but claimed his brother made the final decisions. He denied instructing the employee to trade shares to boost the price. The trading in question occurred between June 2017 and April 2018. Teo's defense contended he intended to privatize the company and thus wanted the share price to remain low for a takeover, not to manipulate it upwards.
District Judge Terence Tay found Teo's oral testimonies illogical and inconsistent with his clearer investigation statements, which were corroborated by call logs and messages. The judge noted Teo's "flip-flopping" on evidence and resort to bare denials when confronted with facts. Evidence supported the prosecution's case that Teo used his brother's account and instructed the employee to create a false appearance of the company's share price.
Prosecutors sought a jail term of nine to 10 weeks, citing the 10-month duration of Teo's actions and his abuse of employee trust. The defense argued for a fine, highlighting the removal of the SGX rule and questioning the public interest damage. Judge Tay agreed that jail was not warranted due to the ad hoc nature of Teo's moves, lack of evidence of profiteering, and his age. He imposed a significant fine to reflect the seriousness of breaching rules designed to protect investors.