MAS, CAD investigating disclosure issues at Raffles Education; company refutes claims by Oei Hong Leong

RAFFLES Education on Thursday (Oct 21) disclosed that the Monetary Authority of Singapore (MAS) and the Commercial Affairs Department (CAD) have requested documents relating to loan facilities extended to its subsidiaries. The private education provider, which called for a trading halt on Oct 19, also responded to claims in a letter by shareholder Oei Hong Leong.

According to the announcement, the authorities are investigating a potential offence under section 203 of the Securities and Futures Act, which covers continuous disclosures. An offence is deemed to have been committed if material information was not disclosed on the exchange to shareholders when it occurred.

The documents requested relate to a loan extended by Affin Bank to Raffles K12 and Raffles Iskandar in Malaysia.

Raffles Education and its subsidiaries had been served writs and statements of claim by Affin Bank on May 27. The company had disclosed these on July 29, "further to discussions" and "at the request" of the Singapore Exchange.

At the time, Raffles Education also called the writs "unmeritorious" and said it had "reached a settlement" with Affin Bank. On Aug 23, Affin Bank filed notices to discontinue the actions under the writs.

Several company directors also attended interviews with the authorities. They are:

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• Chew Hua Seng, chairman and chief executive officer;

• Lim How Teck, lead independent non-executive director;

• Ng Kwan Meng, independent non-executive director;

• Joseph He Jun, non-independent non-executive director;

• Gan Hui Tin, independent non-executive director; and

• Doris Chung Gim Lian, director and key management of Raffles K12 and Raffles Iskandar.

These individuals have surrendered their passports to the authorities, as part of the usual procedure, but no further conditions or restrictions were imposed.

Raffles Education said it will make further announcements on the investigation as and when there are material developments, and that these individuals will fully cooperate with the authorities while keeping the company informed of developments. With the exception of Gan, who had in June indicated she did not wish to seek re-election, all will continue to serve in their current capacities.

Separately, Raffles Education provided exact figures on compensation to refute allegations made by Oei about executive pay.

Chew received compensation of S$2.9 million, and not S$5 million as claimed, the company said. His wife Chung received S$372,240, and not almost S$500,000.

The company has written to Oei to request an explanation of his bases for these allegations and several others made in a letter issued by Oei dated Oct 16.

The announcement also referenced an article by The Straits Times (ST), which claimed the letter had been circulating on Oct 18.

That day, Raffles Education had received a query regarding unusual volume movements in its shares. Raffles Education had responded at the time that it was not aware of any information not previously announced, but mentioned the ST article.

On Oct 19, Raffles Education said, Oei had informed the company of his sale of 38.9 million shares. The sales by Oei accounted for 74.4 per cent of the day's trading volume. Following the sale, Oei's stake in Raffles Education has fallen from 10.2 per cent to 7.3 per cent.

Shares of Raffles Education last traded at S$0.061 on Oct 18.

Read more:

• Oei Hong Leong declares sale of S$2.7m worth of shares in Raffles Education

• Raffles Education shares dive as Oei's letter to board circulates in market

• Studying some red marks at Raffles Education

• Raffles Education says it can continue as going concern; sees no need to suspend trading