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
R Sivanithy, Business Times
17 December 2013
In any discussion with retail trading representatives (TRs) about the current depressed state of penny stocks, the Singapore Exchange (SGX) is invariably singled out as being somehow responsible because of its sudden and unprecedented handling of the infamous trio of Asiasons, Blumont and LionGold on Oct 7 when it slapped a “designated” status on them and suspended trading in three stocks for two weeks.
The main criticism from TRs is that the shock the market received has depressed the entire penny segment - volume has dried up significantly - thereby badly affecting TR incomes.
One email making its rounds extracted from a chat forum estimates that with daily volume below $1 billion, the industry’s average monthly take-home salary per TR is just $1,000 - not at all worthy of a market with international gateway aspirations.
Setting aside the fact that it makes little sense for SGX to deliberately take any action which could hurt liquidity, confidence and ultimately its own bottom line, is the criticism merited?
Not really. This column has pointed out a month ago that responsibility for governance and the integrity of the market cannot rest solely with SGX but also with brokers, their back room staff and managements, and that the exchange is once again the unfortunate and convenient target for criticism when things take a sudden turn for the worse (“Market integrity is responsibility of all parties”, Hock Lock Siew, Nov 15).
However, when it suspended and designated the trio, SGX took great pains to emphasise that it did so because “the market was not orderly, informed or fair”.
Following this in a letter to the press in early November, it said its actions were because its review showed “disorderliness in the market and a lack of transparency which could threaten the fairness of trading”.
Between Oct 6 and now, the only significant bit of information the market has received about trading in the trio came in an Oct 24 Monetary Authority of Singapore (MAS) announcement that it and SGX are conducting an extensive review of the activities surrounding the three stocks.
The questions now which everyone should be asking are - when might the findings of this probe be released, and what was the “lack of trans-parency” SGX referred to in its Nov 1 letter?
There are all sorts of rumours and allegations circulating in the market that relate to the large run-up in the share prices of the three stocks over the past year and their subsequent crash.
Because none of these rumours have been substantiated, the market has been groping in the dark for almost two months, with punters afraid to participate in penny stocks until more is known about the fate of the trio and what the investigation has yielded.
To be fair, there could be a host of complicated issues that need to be looked into and that could be hampering investigations.
But as many will agree, the longer the uncertainty, the more the rumours and the worse the sentiment. Suppose it takes six months to conclude the investigations - is it fair to allow a cloud of uncertainty to hang over the entire segment for that long? What if it takes a year or more? TRs have already suffered a significant drop in income because volume in penny stocks has vanished. The longer it takes to lift the uncertainty, the worse off they will be.
In other words, is it good enough for regulators to step in and send the strongest possible cautionary signal to the market by designating stocks and suspending trading, tell everyone that there’s a lack of transparency, follow this up with an announcement that there is an official probe, then stand back and leave everyone in the dark indefinitely?