[SINGAPORE] A day after the Republic's white-collar fraud fighters swooped into the offices of three Singapore-listed firms, the net was cast wider as they delved deeper into possible trading irregularities in three battered penny stocks.
The Commercial Affairs Department's (CAD) latest move brings the tally to more than 10 top executives - many which are Malaysians - from seven firms and several subsidiaries which have been singled out.
They are being investigated for possible breaches of the Securities and Futures Act (Cap 289) involving trading in the shares of Asiasons Capital, LionGold Corp and Blumont Group, whose shares plunged in last October's sell-off after rocketing to record peaks earlier.
CAD's move, which caught market watchers by surprise on Wednesday, triggered a flurry of trading halt requests followed by revelations that the firms or their subsidiaries had received notices from CAD asking for information and documents belonging to key executives. The firms were Innopac Holdings, ITE Electric Co, Ipco International and ISR Capital.
These firms are connected through a web of complex cross shareholdings and common directors - past and present - to Asiasons, Blumont and LionGold. Annica Holdings, a firm majority owned by Indonesian businessman Edwin Sugiarto and also linked to these firms, was halted from trading pending an announcement.
There was nothing light about the CAD's touch. The Business Times understands that several individuals were questioned and one was arrested and placed on police bail.
Only Asiasons put out a note to clarify that the CAD did not come knocking on its doors. Asiasons shares, which were on trading halt for the the first half of the day, closed 5 per cent lower at 5.5 cents.
Asiasons-linked firms and several broking firms were not as lucky, though. Market sources revealed that the CAD team had "visited" several broking houses and walked away with computers and hand-held devices belonging to remisiers, possibly to pore into the trading details of those being investigated.
"The message is that the regulators will not tolerate flagrant violations of the rules," said remisier Alvin Yong.
Yet there is some disenchantment that this could have happened sooner. "It is about time, after so many months," remarked an avid investor.
The investigation comes six months after the Monetary Authority of Singapore and Singapore Exchange (SGX) revealed that they were extensively reviewing trading in these three stocks that had tumbled and wiped out billions of dollars over just a few days.
But there may have been good reason for the time taken, said a legal expert. "It is likely that preliminary investigations have already been done and the authorities think they now have prima facie evidence to proceed further," he said.
Similar to the notices sent out on Wednesday to Blumont, LionGold and Magnus Energy, the firms involved in the latest sweep were asked to hand over all corporate electronic data from January 2011 until now, and information technology equipment and data storage services belonging to several individuals and subsidiaries.
Innopac, an investment holding firm that counts Blumont and Ipco as shareholders, said CAD had asked its CEO, Wong Chin-Yong, to give access to relevant data and documents. "The board understands that these CAD investigations may be protracted and there is no certainty of an outcome," said Innopac in a note to SGX.
Innopac shares fell 6 per cent to 1.5 cents before trading was halted about half an hour after the market opened.
Catalist-listed ITE Electric, part-owned by Blumont, joined the fray. It said CAD was seeking data on the firm's CEO and largest shareholder, Ho Cheng Leong, chief operating officer Ang Cheng Gian and non-executive, independent director Goh Hin Calm and wholly owned ITE Assets.
Not spared was ISR Capital, majority owned by Asiasons, which said the regulator had on Wednesday sought information of its CEO, Quah Su-Yin, five wholly owned entities and two funds managed by its subsidiary.
Once-upon-a-time market darling Ipco, which owns 6.6 per cent of Blumont, said it and four subsidiaries - IPCO Constructors, Friendship Bridge Holding Company, Nueviz Investment and Sino Gas Holdings - were also being investigated.
Meanwhile, construction firm Swee Hong clarified that LionGold's non-executive independent director Lynne Ng Su Ling and employee Peter Chen Hing Woon - the two are also under CAD's investigations - were no longer in the firm's top 20 largest shareholder list as at March 25.