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
Shirley Yam, SCMP
25 July 2015
What are the chances of one casually spending millions on a penny stock just before a big state firm agrees to take over the company? Very low, right?
Then, what would you say if 12 individuals did the same?
Let’s call them the “lucky dozen” - a merry band of investors made merrier by the acquisition of China Properties Investment Holdings (CPI) by the mainland’s only train maker, CRRC Corp.
On May 19, these 12 bought 1.51 billion shares of the little-known CPI at 10 HK cents each, according to their filing to the stock exchange. Guess what, they are now sitting on a paper profit of HK$2.8 billion.
Their simultaneous discovery of CPI is not the only thing they l have in common. They are all mainlanders. Each bought between 118 million and 139 million shares through shell companies that were set up in March and April.
Given the thin trading of CPI that day, it would be fair to assume all 12 got the shares from an early placement.
CPI is involved in property, metals, money-lending and education businesses. In March, it said it was selling shares at 10 HK cents each to raise HK$250 million to invest in a mining project and a Vancouver property.
The placement was completed on May 28. In less than 24 hours, it signed a legally binding agreement to sell its 60 per cent control to CRRC, also at 10 HK cents per share. The news sent CPI’s price zooming from 86 HK cents to HK$3.29.
There were doubts and suspicion in the market about the acquisition. Doubt, because CRRC is already listed and CPI can serve little purpose given its negligible size. With its plate already full with the merger of the country’s two train makers, another acquisition is the last thing it needs, one would think.
Suspicion, because the very day after the announcement, CRRC’s company secretary said he had never heard of the acquisition.
A week later, the CRRC chairman said the company was in the process of ascertaining the facts.
Apparently, the deal was not instigated by the management of the rail giant. But whoever masterminded it must be very powerful.
Two weeks after the deal emerged, CRRC signed a formal contract to acquire CPI. The train giant’s management, however, remained evasive, dodging queries on the CPI announcement saying that due diligence was yet to be completed.
On June 25, the company page of state-owned Securities Daily splashed with a 3,000-word report quoting a source close to CRRC that CPI might become the giant’s platform in its pursuit of the rail unit of Bombardier, the Canadian multinational aerospace and transport company. It even went on to laud the beauty of CPI’s “diversified” business.
Anyone with a bit of business sense knows the platform thing will not work because CPI, with a market capitalisation of only HK$8 billion, is too small to attempt a takeover of Bombardier’s HK$38.5 billion rail business.
The CPI-Bombardier rumour was swiftly denied by CRRC but by then it had the miraculous effect of keeping CPI’s prices steady in the face of a market rout. More luck and merriment for the lucky dozen.
Last month, state-owned Southwest Securities saw its clients unload 362 million CPI shares at between HK$2.10 and HK$3 each. Southwest’s two major holdings in CPI - totalling 614 million - were acquired on May 19 and 28. It is therefore reasonable to believe that the lucky dozen are among its clients.
If that is indeed the case, they have already profited HK$606 million, or a 1,600 per cent return, in a month.
So is the giant train maker going to take over CPI? The signs are negative.
On June 10, CPI said it had to delay a circular that was supposed to detail the sale of control for shareholders’ approval.
The management called the fund an “attractive investment”. Guess what’s the speciality of Avant Capital? Penny stocks.