Coutts sues Blumont chairman for S$19.9m
Banks, traders seek to recover US$140m from October crash
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Banks, traders seek to recover US$140m from October crash
Bloomberg
19 February 2014
Neo Kim Hock, executive chairman of Singapore commodities company Blumont Group, has been sued by Coutts & Co, taking the sum banks and brokers are seeking to recover from an October crash to at least US$140 million.
Mr Neo owes Coutts S$19.9 million after his shares in Blumont, Asiasons Capital and LionGold Corp held as collateral fell in the sell-off, according to a lawsuit filed in the Singapore High Court. A closed hearing is scheduled for today.
The 65-year-old Malaysian has also been sued by Interactive Brokers LLC after he failed to pay for a S$26.5 million shortfall in his margin account. The Connecticut-based online brokerage firm accused Mr Neo and seven others of a “pump and dump” plan to manipulate shares of the three companies, according to a November lawsuit seeking to freeze S$79 million of their assets.
At least two of the eight defendants are seeking to set aside the freeze, claiming the brokerage was involved in a “commission-generating scheme”, which it denies. The eight haven’t otherwise commented on the claims and Mr Neo didn’t reply to four e-mails and return two phone calls left with Blumont seeking comment.
The claims relate to Mr Neo’s private share holdings, Blumont said in an e-mailed response. The company said that it will update shareholders when appropriate.
Alexander Molyneux was appointed to succeed Mr Neo as Blumont chairman pending the purchase of a stake in the company announced in October. The acquisition has been deferred and Mr Molyneux remains chairman designate, Blumont said this month.
Shares in Asiasons, Blumont and LionGold fell at least 87 per cent over three days in October, wiping out US$6.9 billion in market value. The sudden declines after reaching record highs in the past year prompted Singapore regulators to probe stock activities, propose tighter trading rules and add circuit breakers to protect investors from excessive price swings.
The slump also triggered at least a dozen lawsuits and a 20 per cent decline in Singapore equity trading in the last quarter of 2013 as brokerages curbed investments in riskier small-cap stocks. The three companies have said that they don’t know what caused the share price declines. - Bloomberg