TWO former senior employees of UOB Kay Hian Private Limited (UOBKH) were charged on Wednesday for allegedly lying to the Monetary Authority of Singapore (MAS) in relation to reports on a then Catalist aspirant. Lan Kang Ming, 38, and Wee Toon Lee, 34, each face three charges of providing MAS with false information in October 2018 in relation to due diligence reports on an unidentified company applying to list on the Catalist board of the Singapore Exchange. MAS said in a media statement on Wednesday that it was performing an onsite inspection of UOBKH between June and August 2018, to assess the latter's controls, policies and procedures in relation to its role as an issue manager for Initial Public Offering (IPOs). During the examination, Lan and Wee were said to have provided different versions of a due diligence report relating to background checks on a company applying to be listed on the Catalist board of the Singapore Exchange. UOBKH had acted as the issue manager
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Angela Tan & Kenneth Lim
30 October 2013
Sky One Holdings’ collapse on Monday prompted a number of brokers to update their lists of restricted stocks this week, raising questions about why the Singapore Exchange (SGX) did not impose trading curbs as it had done with three other stocks a few weeks earlier.
Trading in shares of Sky One, a logistics provider being targeted in a reverse takeover (RTO) by a coal- mining business, whose stock fell as much as 91 per cent early Monday before being halted, is currently restricted at several brokers, including AmFraser, CIMB, DMG, OCBC Securities and UOB Kay Hian, according to market sources and some of the brokers’ own websites.
Sky One shares continued to retreat yesterday, shedding 7.6 per cent, or 0.7 cent, to close at 8.5 cents. The stock had entered the weekend at 47 cents.
“It took two years to climb all the way up to whatever price it was, and all it took was one morning for it to collapse all the way down,” one trader said.
“A lot of people lost a lot of money on these. What’s on the street right now is, ‘Oh gosh, what’s next?’ This needs to stop . . . Why don’t we just set everything back to zero, start all over again? Press the reset button.”
The nature of the trading curbs varies with each broker, but there are usually restrictions against online trading, short-selling or Internet trading. There are often also bans on contra trades of such stocks, where shares can be bought and sold before settlement.
OCBC Securities managing director Raymond Chee said in a statement that, in general, curbs are imposed as a way to manage risk.
“OCBC Securities puts in place trading curbs on selected securities from time to time as part of our credit risk management process,” he said. “Such stocks, which have typically experienced high volatility, cannot be traded online. Any trade that is larger than $25,000 will also require a cash deposit for the amounts in excess.”
Other new entrants to restricted lists yesterday included IT service provider OKH Global, at UOB Kay Hian; and construction company Swee Hong, at AmFraser.
All three companies have been queried by SGX recently because of unusual trading activity in their shares. All of them have replied that they were not aware of any undisclosed information that could affect their share prices.
While the brokers have imposed curbs on Sky One, SGX has not - puzzling some observers.
“SGX might as well switch off its system at this rate,” one broker said. “Its poor communication has killed what’s left of the penny stock market.”
SGX has so far only queried Sky One, but not intervened in the trading of its shares.
This is in contrast to the bourse operator’s actions on Oct 4, when it queried six companies and then suspended three of them amid sharp drops in their shares.
The suspended stocks (Asiasons Capital, Blumont Group and LionGold Corp) had fallen between 40 and 65 per cent on the morning of Oct 4 before they were suspended by SGX - smaller drops than Sky One’s plunge on Monday.
SGX later allowed trading in those three stocks to resume, but only under “designated” rules that bar short-selling and require upfront cash settlement.
SGX said at the time that it had taken those actions to ensure that enough information was available to the market, and to allow orderly trading to resume. SGX and the Monetary Authority of Singapore (MAS) are currently reviewing the trading of those three stocks.
The difference between the treatment of those stocks and Sky One has raised some questions. One fund manager said SGX ought to better communicate the rules, if only because trading suspensions and “designated” labels are so unfamiliar to most of the market.
“It’s something they haven’t done very often,” the fund manager said. “Even if it was judiciously used, it’s so sparingly used, so infrequent . . . the majority of the people don’t understand how it works.”
Kelly Teoh, market strategist at IG Asia, said part of the problem was that valuations are stretched, and many retail investors are more exposed to the more volatile penny stocks.
“You want people to have a more holistic view of investment,” Ms Teoh said. “Unfortunately, people tend to have the notion that equities only go up. It is shocking, and not a right mentality . . . Hopefully, when SGX implements the smaller denomination trades for the bigger stocks, that will give people some diversification.”