SINGAPORE: The former chief executive officer of offshore gas and oil contractor Swiber Holdings and seven ex-directors of the collapsed firm were charged in court on Friday (Oct 13) over the misleading announcement of a US$710 million (S$972 million) project it claimed to have secured in the West African market in 2014.
Instead, Swiber had signed only a letter of intent authorising it to spend up to US$2 million.
In the two years following the announcement, some directors also failed to inform the Singapore Exchange that Swiber Offshore Construction had lost its Champion Waterflood Project in 2014.
This disclosure was necessary to avoid establishing a false market in the mainboard-listed Swiber’s securities, and was required under the SGX Mainboard Rules.
The chargings come almost seven years after investigations first began into Swiber’s possible breaches of the Securities and Futures Act, and after Swiber Holdings was delisted with effect from June this year.
The eight charged on Friday are: Former Swiber CEO and Singaporean Yeo Chee Neng, 55, who received the most charges of the group with nine levelled against him; as well as ex-directors Chia Fook Eng, a 79-year-old Singaporean; Malaysian Francis Wong Chin Sing, 59; 52-year-old Singaporean Nitish Gupta; 56-year-old Malaysian Oon Thian Seng; 73-year-old French national Pers Jean; 55-year-old Singaporean Raymond Kim Goh; and 54-year-old Singaporean Leonard Tay Gim Sin.
Kim was the founder of Swiber and executive chairman, while Wong was group CEO and Tay was group chief financial officer.
According to charge sheets, the directors either were responsible for, consented to or displayed neglect over Swiber’s announcement on the SGX Exchange Network in December 2014 stating that it had secured a project worth US$710 million.
The false statement was likely to induce others to buy securities, the charge sheets stated.
According to an SGX announcement reprimanding Swiber in October 2016, Swiber had failed to provide a “balanced and fair announcement” over this project.
Swiber’s December 2014 announcement of the project was titled “Swiber breaks into the West African market with US$710 million field development award”.
According to SGX, the announcement stated that Swiber had secured the project from a Houston-based oil and gas company to provide services for an offshore field development project.
In July 2016, Swiber announced that the project had not been able to progress according to its original schedule and that there had been no revenue from the project.
Most of the eight men’s charges are similar and mirror each other, except for the ones faced by Yeo, former Swiber CEO, who received several unique charges including insider trading.
Between May and June 2016, he allegedly knew that Swiber was looking for investors to inject funds to pay off its bonds that were due for redemption in June and July 2016, failing which Swiber may have to default on the bonds.
Swiber was unable to secure the funds to redeem the 2016 bond and had to obtain a bridging loan from DBS Bank to do so.
A potential investor also failed to remit funds to Swiber, which the company intended to use to redeem the July bond.
Despite knowing that this information, if generally available, would have a material effect on the price of Swiber’s securities, Yeo allegedly told his wife, Yio Cheng Cheng, about it. This was when he ought to have known that she would likely sell the securities of Swiber if she became privy to such information.
He also allegedly got his wife to sell S$500,000 worth of Swiber bonds that were in a joint account belonging to him and Yio.
Yeo is also accused of recklessly failing to give notice in writing to Swiber of thousands of debentures or long-term securities he held via a joint account with his wife.
Swiber filed for liquidation in July 2016 facing hundreds of millions of dollars in debt, Reuters reported in 2016, calling it “the biggest local name to fall victim to the slump in oil prices”.
Swiber had just 10 vessels in 2006 when it listed, and expanded to own and operate a fleet of 51 vessels, with more than 2,700 employees across South-east Asia and other countries, according to the Reuters report.
The penalties for making a false statement likely to induce the purchase of securities by others are a jail term of up to seven years, a fine of up to S$250,000, or both.