Starburst chairman, MD, CFO interviewed in corruption probe

Singapore

SHARES of Starburst Holdings, which designs and installs anti-ricochet ballistic protection systems, plunged on Monday after it disclosed that its co-founders are out on bail amid a probe by Singapore's anti-corruption watchdog.

The Corrupt Practices Investigation Bureau (CPIB) last Thursday interviewed executive chairman Edward Lim Chin Wah, managing director Yap Tin Foo, chief financial officer (CFO) Wu Guangyi, and senior project manager Josiah Lawrence Ng Eng Long.

This was in relation to the Catalist-listed firm's wholly-owned subsidiary Starburst Engineering.

Mr Lim, Mr Yap and Mr Ng are out on bail, said Starburst in a filing on Sunday night. It did not state the CFO's status in relation to the probe.

Starburst's stock had begun to decline last Thursday, the day of the CPIB interviews, shedding 1.2 per cent or 0.5 Singapore cent to close at 40 cents.

The counter tumbled further on Friday, losing 6.3 per cent or 2.5 cents to end at 37.5 cents.

On Monday, its shares saw heavy volumes and the price plummeted as much as 68 per cent to an intraday low of 12 cents, according to Shareinvestor data. The stock closed at 13.1 cents, down 65.1 per cent or 24.4 cents from Friday.

About 22.7 million shares changed hands during the day, several times the 5.8 million monthly average of the stock's cumulative trading volume in the last three months. The company did not call for a trading halt prior to the Sunday announcement.

In response to The Business Times' queries, the Singapore Exchange Regulation (SGX RegCo) said it will look into the matter in respect of Starburst and, if necessary, take the appropriate regulatory action.

In general, any investigation by the authorities of a director of a listed issuer can be a material development. "Such an incident could hurt the interest of both the company and its shareholders. The listed issuer and its board therefore have several important obligations when this happens," a SGX RegCo spokesperson noted.

For one thing, the regulator expects issuers to assess if they need to disclose such investigations as soon as possible via SGXNet, and the disclosure must, as much as possible, state how the investigations are related to the issuer. Issuers must also ensure that any director involved in a probe complies with character and integrity requirements on a continuing basis, the spokesperson added.

Mr Lim and Mr Yap co-founded the Starburst business in 1999. Their combined stakes in Starburst exceeded 66 per cent as at Oct 9 this year, according to Shareinvestor data.

Starburst said in its filing that Mr Yap's passport has been retained, while Mr Ng's passport had been requested to be provided on Monday.

The board, with Mr Lim and Mr Yap recusing themselves, believes that the three men placed on bail should continue with their responsibilities and duties in the operation of the group's businesses.

This is so as to ensure business continuity, it added. The board will reassess its position where appropriate.

Starburst noted that the CPIB investigation is not related to the group's current projects, and accordingly does not affect the group's business and operations.

The Singapore-based group's customers include law enforcement, military, security agencies and civil authorities in South-east Asia and the Middle East, according to its website.

Starburst Engineering in March clinched a S$40.9 million contract - the group's biggest to date - to build a firearms training facility in South-east Asia over two years.

In July, the subsidiary also bagged a S$13.1 million contract to upgrade a tactical training mock-up facility in South-east Asia.