WBL Breached Stock Agreement With Insider-Trading Ex-CFO, Judge Rules
WBL Corp. breached a share option agreement when it refused to seek approval to issue stock to ex- finance chief Kevin Lew Chee Fai, who was found liable in Singapore’s first civil insider trading lawsuit, a judge said.
Singapore High Court Judge Lai Siu Chiu ordered WBL to get the consent of the relevant authorities to issue Lew 167,500 shares for his stock options exercised in July 2007, according to the July 30 judgment, released today.
“If WBL does not obtain the requisite consent to issue the shares and hence is unable to do so,” Judge Lai said, “it would not be in breach of contract in refusing to issue the shares to Lew.”
Lew, 50, was forced to resign from WBL, a distributor of Volvo and Jaguar cars, in July 2007. The Monetary Authority of Singapore sued Lew, who it said avoided a loss of S$27,000 by selling WBL shares two days after learning it was forecast to report losses on July 2, 2007. Lew was fined S$67,500 ($50,000) last month for insider trading.
Lew, who’s appealing the insider trading penalty, has said he didn’t think the information disclosed was price-sensitive and sold the shares to raise funds for his stock options.
WBL shares were unchanged at S$4.52 at 3:05 p.m. in Singapore trading. The stock has fallen 12 percent this year, compared with a 3.8 percent increase on the benchmark Straits Times Index.
The case is Kevin Lew Chee Fai vs WBL Corp. Ltd. S129/2008 in the Singapore High Court.