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Blumont not aware of any stock price manipulation

Firm says it is SGX's job to find out if there was any trading irregularity

BLUMONT Group said it was not aware of any manipulation to its share price, calling it the job of the Singapore Exchange (SGX) to find that out and not that of the management.

"That's for the exchange to look into; that's not for the company to look into. We don't have the resources or authority," Blumont's chairman-designate Alexander Molyneux said at a briefing yesterday. His appointment was announced on Monday evening.

Executive director James Hong said the company is currently not under investigation, and he does not see a reason for that.

Blumont, Asiasons Capital and LionGold Corp had strong run-ups in their stock prices this year, until the SGX suspended their trading last Friday because of big price falls. The regulator was concerened that there could be circumstances that would result in the market not being fully informed.

Blumont shares jumped as much as 131 per cent to 30 cents yesterday, reversing two days of losses that had wiped out $4.9 billion from its market value, before closing unchanged at 13 cents.

"In my personal view, whether or not any regulatory issues caused the share-price slide, I believe it created a unique value opportunity. That's why I bought the stock," Mr Molyneux said. He has agreed to buy 135 million Blumont shares at an indicative price of 40 cents per share, representing about 5.2 per cent of the total shares outstanding, post rights issue.

He believed that the company is undervalued and decided to take advantage of the opportunity, he added.

Mr Molyneux is chairman of uranium company Azarga Resources and executive chairman of Australia-listed coking coal firm Celsius Coal.

He was also chief executive officer of SouthGobi Resources, a Mongolia-focused mining company, before his service was terminated.

Blumont, which began expanding into the mineral and resources sector last year, scrapped plans to buy Australia-listed Cokal Ltd after its share price crashed last Friday. Instead, Blumont extended a loan facility of up to US$8 million to Cokal to allow the latter to continue work on its Bumi Barito Mineral project in Indonesia.

"We love the asset as much as we did on Friday," Mr Molyneux said, adding that the two companies were still in discussions about the potential takeover offer. The loan to Cokal is funded by Blumont's cash and proceeds from the rights issue.

Blumont, through wholly owned subsidiaries G1 Investments and Tria Holdings, has interests in Asiasons, LionGold and Innopac Holdings.

Mr Hong said Blumont has invested in these companies for a long time, and would consider selling some of its "legacy business" off within the next year or so.

"Moving forward, we have a new focus on where we're heading. We'll look at our legacy business: if it doesn't fit into our strategy, we will probably divest it or come up with new solutions," he added.