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 issu...
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BY FRANKIE HO, The Edge
09 December 2013
Grand plans by Alex Molyneux, Blumont Group’s incoming chairman, to transform the struggling diversified business group into a full-fledged mining company may have hit more roadblocks.
The former CEO of Toronto - and Hong Kong - listed SouthGobi Resources said in October that he would take a 5.2% stake in Blumont by buying 95 million shares from current chairman Neo Kim Hock and 40 million shares from another shareholder. The transaction was initially expected to be completed by November 6, after which Molyneux would be named chairman, with Neo re-designated as deputy chairman.
The deadline had since been extended to Dec 6. Now, however, it appears another extension may be needed, in the wake of recent legal action by Nasdaq-listed Interactive Brokers Group to freeze the assets of Neo.
The online discount broker is out of pocket to the tune of US$68 million ($85 million) after its clients were left with huge losses when the share prices of Blumont. Asiasons Capital and LionGold Corp collapsed in ealy October. Neo is one of six individuals targeted by Interactive Brokers, which has also sought court orders to freeze the assets of two companies as it attempts to recoup its own losses.
“It is a technical issue, but shares cannot be transferred until they’re released by the broker, and so this is holding everything up for me,” Hong Kong-based Molyneux tells The Edge Singapore. “It’s a wrinkle for me, but it’s a fact of life.
He says he can either proceed to buy the block of 40 million shares and wait for Neo’s issue to be resolved, or extend the deadline by another 30 days. “Everyone’s open about it. It’s all very friendly between us. Nobody has any change of intention.”
Molyneux’s acquisition price is based on the volume-weighted average of Blumont’s share price between the date of the agreement in October and the close of the transaction, subject to a minimum of 20 cents a share and capped at 60 cents.
Either way, he would still be paying a lot more than if he were to buy the shares on the open market. given that the stock now trades at just seven to eight cents. At those levels, the 5.2% stake is worth between $9.5 million and $10.8 million, much less than the minimum $27 million Molyneux would need to fork out.
Ambitions looking remote
In any case, what is perhaps of greater interest to the investment community is whether the delay in his appointment as chairman - to be finalised only after the stake purchase is completed - will affect Blumont’s growth plans.
Molyneux had said in an interview in October with The Edge Singapore that one of his immediate priorities once he takes the helm was to change the management team and “find the right balance of expertise as the company starts to handle operating assets” in the mining and energy resources sectors. He had also said publicly that he saw Blumont eventually becoming the BHP Billiton of Asia.
But, from the way things are shaping up so far, those ambitions look increasingly remote. Besides the delay in Molyneux’s appointment, he and Blumont could be tied down by other matters.
Australia-listed Resource Generation said on December 5 that it was taking action to obtain A$22.6 million ($25.6 million) that Blumont was supposed to pay for taking a 15% stake in the South Africafocused coal miner. The amount was due on December 4. Shareholders of Resource Generation, which counts Noble Group as an investor, approved the stake sale in late November, two months after Blumont announced the deal.
By Molyneux’s account, Blumont technically has three months to pay up, from the date of the approval by Resource Generation’s shareholders. “The original agreement was if they demanded payment within a certain time, we would have to pay. But the way it works under Australian rules is we have three months. They weren’t that interested in being flexible with us.”
Molyneux says the issue can be resolved once Blumont concludes a US$200 million financing agreement with New York-based hedge fund Platinum Partners. Blumont said on October 18 that it would issue redeemable convertible bonds to Platinum in four tranches of US$50 million each at a coupon rate of 8% a year. The proceeds would be used to fund investments in the natural resources sector. According to Molyneux, the financing agreement with Platinum could be finalised within a week or two.
The discord with Resource Generation came barely a week after Australia-listed Prospect Resources said it had commenced legal proceedings in the state of New South Wales against Blumont, Molyneux and Singapore-based Pacific Advisers for terminating an agreement to jointly take a 43.5% stake in the minerals exploration firm. The three parties called off the planned A$3.9-million investment on Oct 31, saying Prospect Resources had not met certain conditions.
“Everyone’s very, very worried about Blumont right now,” concedes Molyneux. “If you had asked me a month ago whether I’d expect there to be so many complexities - in terms of things like the difficulty in closing the share acquisition, all the lawsuits rolling around, and the issue with Prospect Resources - I probably wouldn’t have anticipated them. It’s just a lot of work.”
He is not throwing in the towel just yet, though. “If we can get all these complexities behind Blumont and execute some of the bigger things, we will sit here in two or three years’ time and it will all look pretty smart. The long-term potential is still there.