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
Comments
Securities Association of Singapore
19 October 2013
In the past week, there has been significant press coverage on the now infamous trio of designated stocks - Asiasons Capital, Blumont Group and LionGold Corp.
The deflation of the bubble created by these three and other closely associated stocks have widespread impact on the industry and have affected investors ranging from hedge to long funds and retail traders alike across various intermediaries such as the private banks, foreign and local brokers.
There seems to be a misguided perception that contra trading was the singular cause for the bubble.
It is evident that a wide spectrum of traders participated in these counters through various means including leverage via margin accounts or other forms of leverage via brokers and private bankers.
To blame the current woes solely on contra trading defies logic when the extremely high trading volumes were contributed also by other leveraged means. Why are other forms of trading, ie margin or other forms of collateralised trading, not to be blamed?
In fact a greater portion of the trading losses may be residing in these leverage accounts as seen in a report in The Straits Times yesterday, “LionGold shares force-sold by banks”, on a bank force-selling of a position held by a prominent Malaysian personality.
Perhaps the crux of the issue lies not with contra or other forms of leverage trading but the failure by the industry to recognise and react in good time to the possibility that certain elements or parties may be seeking to exploit the system.
Arising from this incident, the industry as a whole - SGX (Singapore Exchange), SAS (Securities Association of Singapore), SOR (Society of Remisiers) and SIAS (Securities Investors Association, Singapore) - collectively could be more vigilant in safeguarding our market from being exploited by various elements which may affect the integrity of SGX as the market place, to the detriment of our investors.
There should, however, be a balanced approach to avoid stifling the market. There are examples of well-timed and self-initiated intervention by certain participants to try to remove the bubble pressure building up in some of the counters to lessen the impact on both investors and the intermediary of a full-blown meltdown.
Blaming the current outcome on contra trading is too simplistic to the point of being naive.
Contra trading has little to do with essentially a gross mispricing of a given counter. If contra trading is to be blamed then perhaps margin trading played a greater role in sustaining the bubble as positions can be held indefinitely as long as margin ratios are maintained. Do we also ban margin or collateralised trading?
We need therefore to see the wood from the trees.