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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Kenneth Lim
31 October 2013
Singapore Exchange (SGX) has found “no threat to fair, orderly and transparent trading” in the sharp drop of Sky One Holdings stock earlier this week.
In contrast, a review of trading in Asiasons Capital, Blumont Group and LionGold Corp showed “a lack of transparency” that could have threatened fair trading, the local bourse operator said yesterday.
The exchange made these comments amid questions as to why regulators had not intervened more strongly in Sky One when just three weeks earlier they had suspended and then imposed trading curbs on the three other stocks, which had also suffered unusually sharp price drops.
“Not all sharp price movements, whether up or down, warrant a suspension of the stock . . . In the case of Sky One, SGX’s review of the circumstances revealed no threat to fair, orderly and transparent trading. Hence, no suspension occurred,” SGX said in a statement.
With regard to the three previously suspended stocks, “SGX’s review showed disorderliness in the market, and lack of transparency which could also threaten the fairness of trading”, the exchange said.
SGX also said that trading curbs, via the “designated” label, were not necessary for Sky One, a logistics provider being targeted in a reverse takeover by a coal mining business. In the case of Asiasons, Blumont and LionGold, which had their designated labels lifted on Oct 21, designation and suspension were aimed at helping to “return the market to finding its own equilibrium”.
While SGX and the Monetary Authority of Singapore have said that they are reviewing the trading of Asiasons, Blumont and LionGold, they have not said if Sky One is also being reviewed.
“We understand the public wanting to know more about such investigations, but releasing information prematurely could jeopardise the integrity of the investigation,” SGX said.
Some market observers weren’t satisfied with the explanation.
“How was the review of the circumstances conducted? Is there a clear-cut template that’s applicable for all stocks? What are the criteria and parameters? Or was it conducted by a single inexperienced person with gut feel of the situation?” said one retail investor.
“SGX mentioned disorderliness, lack of transparency, etc. There’s no detailed explanation. Simply arbitrary. There’s nothing in the clarification that satisfies my question on how the different standards were applied to different stocks.”
But David Gerald, president and chief executive of retail investor advocacy group Securities Investors Association of Singapore, said SGX was doing a reasonable job given its existing tools.
The bourse operator and regulator’s explanations were “helpful and adequate”, and appear to be working as intended, he added.
Mr Gerald said that in this instance, investors have to own some of the responsibility if they suffered any losses from the affected stocks.
“SGX has got limited tools - query, suspension and designation - and this is about the same as you would find in other jurisdictions and developed markets like Hong Kong or Australia,” he said.
“. . . the difference is investors here like to make money, but when the investment is affected adversely, they look for a scapegoat.”
The key lesson for investors is that there is no substitute for careful analysis of fundamentals and investment goals.
“My advice to investors is, if you are choosing a stock, be it a penny stock or blue chip, ask yourself what you are looking for,” Mr Gerald said.
“If the stock has got a price-earnings ratio of 400 times, why are you there?”
Shares of Sky One remained under pressure yesterday, slipping 3.5 per cent, or 0.3 cent, to close at 8.2 cents.
Asiasons, Blumont and LionGold, which have fallen as much as 90 per cent from just before their stocks collapsed on Oct 4, were also weaker yesterday.
Asiasons closed at 15.5 cents, down 1.9 per cent or 0.3 cents. Blumont shed 7.8 per cent, or 1 cent, to close at 11.9 cents, while LionGold lost 6.8 per cent, or 1.4 cents, to head out at 19.1 cents.