[SINGAPORE] Singapore's white-collar crime-buster, the Commercial Affairs Department, launched what is possibly the widest-scale investigation involving three listed firms yesterday in connection with the penny stock rout that gripped the local market last October.
A joint statement by the Singapore Police Force and the Monetary Authority of Singapore said that the CAD has started investigating possible breaches of the Securities and Futures Act (Cap 289) arising from suspected trading irregularities in the shares of Asiasons Capital, LionGold Corp and Blumont Group.
The CAD is working jointly with the Monetary Authority of Singapore in the investigation.
The statement is the first clear indication of what may have led to last year's free fall in the three penny stocks that swept up a staggering $5 billion in market value within the first trading hour on Oct 4 after they had risen on a super high octane in the preceding months.
This latest remark about the CAD coming into the fold follows a probe by the MAS and Singapore Exchange which began late October last year into the events that could have led to the penny-stock meltdown which left many investors burnt.
Separate announcements by Blumont and LionGold, which had requested for trading halt around noon yesterday, show that the investigations involve their firms' top executives and directors.
The CAD has asked the firms and their respective wholly-owned subsidiaries for access to all data, equipment and data storage devices belonging to four individuals who are connected in one way or another.
They are Blumont executive chairman Neo Kim Hock and executive director James Hong Gee Ho and LionGold's non-executive, independent director, Lynne Ng Su Ling, and employee Peter Chen Hing Woon.
All four are involved in legal tussles with the US banking and broking giants involving hefty claims as a result of the losses suffered following the penny stock fallout last year.
There was neither any announcement nor trading halt request by Asiasons.
Later in the day, Magnus Energy, somewhat connected via a web of cross holdings and common directors, also announced that two subsidiaries and a former subsidiary had received notices from the CAD to cough up all information and data belonging to the firm's executive director, Koh Teng Kiat, and chief financial officer Luke Ho Khee Yong.
Blumont said that its wholly-owned G1 Investments was asked by the CAD yesterday for access to all corporate electronic data from Jan 1, 2011 to date, information technology equipment and data storage services belonging to Mr Neo and Mr Hong.
Mr Hong, who has been asked to assist the CAD in the probe into a possible infringement under the SFA, has indicated full cooperation, said Blumont.
Blumont shares, which resumed trading at 4.45pm, fell 0.9 cents or 16 per cent to 4.9 cents.
The CAD also issued similar notices to LionGold and its wholly-owned LionGold Investments for all data and relevant documents over the same period belonging to Ms Ng and Mr Chen. Ms Ng was formerly a Blumont director while Mr Chen is LionGold's business and corporate development director.
Interestingly, both names also appear in construction firm Swee Hong's list of top 20 largest shareholders.
LionGold said that the board was "not aware if any offence has been committed" and has not heard from the two individuals in respect of the investigations.
Based on data from Handshakes, a firm which analyses networks in the capital markets, Blumont's G1 also owns interests in LionGold, Asiasons, Innopac Holdings, China Fibretech and Catalist-listed ITE Electric Company and Chaswood Resources.
The web of connections in the penny stock realm doesn't end there. Asiasons owns 64 per cent of Chaswood and 8 per cent of LionGold and also has interests in ISR Capital. On the other hand, Innopac Holdings is 7.2 per cent owned by Ipco International.
Magnus' largest shareholder is Wira Dani Abdul Daim who also owns 15 per cent in ISR Capital. Asiasons is ISR's largest shareholders.
Sources say several individuals were called up for questioning yesterday by the CAD and that more announcements involving them and companies they are linked to could ensue in the following days.
A legal expert said given the events that have taken place involving the shares of these firms, trading irregularities could mean a lot of things.
"A chunk of the SFA covers trading-related offences such as insider dealing, manipulation of share prices, false trading, wash sales, among others," said the legal expert. "Some times, one particular action can also cover a few offences," he added.