Insider trading the focus of Datacraft probe

The investigation launched last week by Singapore’s Commercial Affairs Department (CAD) into system integrator Datacraft Asia Ltd. concerns allegations of insider trading at the time when the company was finding out about a bad debt problem in China, Datacraft has confirmed.

CAD is a division of the Singapore Police which deals with corporate wrongdoing.

Datacraft, a subsidiary of Johannesburg, South Africa-based Dimension Data Holdings plc, also admitted that the Singapore Stock Exchange (SGX) reprimanded the company privately in May over the way it handled disclosure of the bad debt matter.

“Whilst Dimension Data was uncertain as to the full scope of the investigation by the Commercial Affairs Department, or who in particular was being investigated, insider trading allegations was certainly being covered in their investigations,” the company said in an announcement to SGX late Friday.

On April 22, Datacraft made its first public announcement about a bad debt problem in China, saying “current indications are that a further increase in AR (accounts receivable) provisions may be necessary at that time but it is premature to quantify the figure.”

The next day, according to SGX investigations, Datacraft’s new China finance team indicated that there might be a total doubtful debt exposure in China of up to US$19.3 million.

After finishing its investigation, SGX replied in a letter to Datacraft: “In our view, the statement made on 22 April …. was not accurate. In relation to this, the Exchange (SGX) privately reprimands Datacraft for its failure to make an appropriate disclosure in relation to the AR provisions.”

Insider trading generally occurs when executives of a company are made aware of a situation which could materially affect the company’s stock price, but that situation is not made known to a wider audience. Buying or selling the company’s shares under those conditions is illegal in most countries, including Singapore.

In an initial response to suggestions last week that CAD was pursuing allegations of insider trading, Datacraft summed up the earlier SGX investigation as: “The exchange previously investigated the allegations, but nothing materialized.”

Datacraft later clarified this statement by saying: “We are informed that it is not the Exchange’s policy to disclose publicly or to listed companies whether matters have been referred to other authorities for investigation.”

Would you recommend this article?


Thanks for taking the time to let us know what you think of this article!
We'd love to hear your opinion about this or any other story you read in our publication.

Jim Love, Chief Content Officer, IT World Canada

Featured Download

Featured Articles

Empowering the hybrid workforce: how technology can build a better employee experience

Across the country, employees from organizations of all sizes expect flexibility...

What’s behind the best customer experience: How to make it real for your business

The best customer experience – the kind that builds businesses and...

Overcoming the obstacles to optimized operations

Network-driven optimization is a top priority for many Canadian business leaders...

Thriving amid Canada’s tech talent shortage

With today’s tight labour market, rising customer demands, fast-evolving cyber threats...

Staying protected and compliant in an evolving IT landscape

Canadian businesses have changed remarkably and quickly over the last few...

Related Tech News

Tech Jobs

Our experienced team of journalists and bloggers bring you engaging in-depth interviews, videos and content targeted to IT professionals and line-of-business executives.

Tech Companies Hiring Right Now