MAS issues directive to Pine Capital unit to suspend fund-raising, subscription activities

Singapore

CATALIST-listed asset management group Pine Capital on Tuesday provided a series of updates on matters relating to its unit Advance Capital Partners Asset Management Private Limited (ACPAM), which has been reprimanded by the Monetary Authority of Singapore (MAS) and embroiled in legal proceedings with its former chief executive.

The group had, in April, called for an extraordinary general meeting (EGM), which proposed the removal of ACPAM's then-CEO and director Tan Choon Wee from the board of ACPAM. Pine Capital said it did so because it had "received numerous allegations from various parties concerning the operations of ACPAM, including allegations in respect of (a) potential conflict of interest and possible lapses in internal control".

The group had earlier requested a suspension in the trading of its shares, based on similar concerns.

Mr Tan had sued the group, claiming that ACPAM's affairs had been conducted in a manner prejudicial to him; Pine Capital subsequently commenced its own legal proceedings against Mr Tan and other former directors and officers of ACPAM. Both legal actions are still ongoing.

Meanwhile, MAS had in April reprimanded Mr Tan for - among other things - failing to discharge his duty and function as ACPAM's CEO and director. This was after the fund management company continued to be late in its submissions to MAS after having been already reprimanded by the authority in July 2018 for being repeatedly late in its regulatory submissions.

On May 28, Pine Capital announced several updates to these developments.

Firstly, it said that Advance Opportunities Fund I (AOF I) - one of the two funds currently under ACPAM's management - has served a notice of termination of its management agreement to ACPAM in March, with the end of the notice period for ACPAM as investment manager being June 16.

Pine Capital also said that ACPAM had written to MAS on several occasions, in April and May, providing updates on ACPAM's EGM - which was held on May 10 - and the aforementioned legal proceedings it is involved in.

Lastly, it said that ACPAM had received a letter from MAS on May 17, in which the regulator directed that ACPAM should suspend all fund-raising activities and all subscription activities, and should not enter into any new investments or draw down on any commitments on behalf of any fund or segregated mandate that is managed by ACPAM, "until certain conditions are satisfied".

Pine Capital said it understands from ACPAM that the MAS directive came about "because ACPAM was unable to carry out its fund management functions effectively with regard to AOF I due to certain restrictions placed by the directors of AOF I on ACPAM to prevent ACPAM from being involved in matters of AOF I".

It added that ACPAM is currently working closely with the MAS in resolving the issues, and that ACPAM believes the concerns set out in the MAS directive have been addressed and that it has conveyed the same to the MAS.

Pine Capital also said that it is of the view that the AOF I matter has had no significant impact on the financials of the company, and that it will continue to update its shareholders where appropriate.