Lawsuits shine light on Goldman’s role in Asiasons, Blumont and LionGold crash

[CityFarmer]

If SC did do a BIG short, does it mean they act on insider info?

If GS did that, it is not acting on insider info, IMO. But SGX Rule 3.4.15 Prohibited Conduct states

"A Member, a Registered Representative or an Approved Trader shall not participate in any prohibited market conduct or in any insider trading, or knowingly assist a person in such conduct."

[specuvestor]

So far never mention about why they make the margin call

That is why I am not surprised that Malsysia linked brokers are involved. I am surprised that GS is involved. I'm wondering now who told GS to pull the plug. It would be interesting to see GS defence.

By Andrea Tan
Jan. 10 (Bloomberg) -- A Goldman Sachs Group Inc. unit
denied dumping a Singapore private wealth client’s shares it
held as collateral and said it’s still owed money.
Quah Su Ling sued Goldman Sachs International in London,
accusing it of breach of contract for selling her shares in
Blumont Group Ltd., Asiasons Capital Ltd. and LionGold Corp. and
depressing their prices. Goldman Sachs International countersued
for $12.3 million it says it’s still owed.
Goldman Sachs International sold the shares in an “orderly
and measured manner -- consistent with industry practice and
accepted standards -- over the course of three weeks,” the bank
said in court papers filed in London and made available this
week. The lawsuit is Quah’s “attempt to delay or avoid
repayment of debt.”
Shares of the three Singapore companies tumbled with
Asiasons falling 62 percent on Oct. 4, while Blumont declined 56
percent and LionGold was down 42 percent. Over three days from
Oct. 4, the declines erased $6.9 billion from Singapore’s bourse
value. The Monetary Authority of Singapore and the city’s stock
exchange said they would probe activities around the shares of
the companies.
Quah, the Chief Executive Officer of IPCO International
Ltd., claimed Goldman Sachs demanded she repay $48 million
within 1 1/2 hours on Oct. 2 and started selling her shares. The
bank hadn’t informed her previously of any shortfall in her
margin loan or give her reasonable time to make payment, Quah
said in court papers.
Edward Naylor, a Hong Kong-based spokesman for Goldman
Sachs, declined to comment on the lawsuit. Quah didn’t respond
to two e-mails or a call to her office.
Goldman Sachs has also been sued in London by James Hong,
an executive director at Blumont. Hong claimed the bank breached
its duties by “arbitrarily” selling his shares in the three
Singapore commodity companies held as collateral, according to
the complaint.
Regulators around the world have stepped up oversight of
capital markets after the global financial crisis in 2008.
Singapore’s central bank established a 13-member council in 2010
with the goal of boosting corporate governance standards and
investor confidence. The Singapore Exchange, Southeast Asia’s
biggest bourse, said after the decline of the three stocks it
plans to add circuit breakers in 2014 to halt trading for 10
minutes when shares move 10 percent in either direction.
The case is Quah Su Ling v Goldman Sachs International.
HQ13X05341. High Court of Justice, Queen’s Bench Division.

[cfa]

Banks can always just call back the loans on demand , no need to give explanation. The borrowers signed and agreed.

[dydx]

Put simply, Quah Su Ling and James Hong advertently played with fire near explosives, and unfortunately there was a big explosion and they got badly burned. They can only blame themselves.

Such people should be barred from running public-listed companies!

[specuvestor]

Missed this last week:
http://www.businesstimes.com.sg/premium/...n-20140402

To paraphrase Xi JinPing, let's see if they have the political will to hunt the tiger down after swatting the flies

However IMHO I think all these people leads back to a Malaysia linked entity.

Do you think they are just the foot soldiers?

Soh and Lee were good friend from same Kumpung of Batu Pahat.

IIRC when Lion Gold first started being promoted by DMG, we asked them why they can acquire assets in Africa, answer was there was a well-connected Malaysian involved.

That is why I am not surprised that Malsysia linked brokers are involved. I am surprised that GS is involved. I'm wondering now who told GS to pull the plug. It would be interesting to see GS defence.

[safetyfirst]

Put simply, Quah Su Ling and James Hong advertently played with fire near explosives, and unfortunately there was a big explosion and they got badly burned. They can only blame themselves.

Such people should be barred from running public-listed companies!

Well said! they deserved it, i even think they should be locked up

[greengiraffe]

Missed this last week:
http://www.businesstimes.com.sg/premium/...n-20140402

Troubled LionGold banking on Daim Zainuddin's son
Wira Dani Abdul Daim is exec deputy chairman as well as exec director of firm
BYANITA GABRIEL
anitag@sph.com.sg
PRINT |EMAIL THIS ARTICLE
BT 20140402 AGLION02 1025379
Mr Wira: According to LionGold, 'Datuk Wira does not hold executive positions on other boards and will focus his efforts on LionGold's operations. He is currently formulating his plan for LionGold.' - PHOTO: THE STAR
'In spite of the unfortunate events which led up to the forced selling of his shares, Datuk Wira remains positive on the prospects of LionGold's business.'
- LionGold
BELEAGUERED gold miner LionGold made a string of announcements on Monday pertaining to board changes and its plans to raise close to $40 million through the issue of shares and bonds.
But the announcement that would have piqued curiosity was the appointment of Wira Dani Abdul Daim, the son of Malaysia's former finance minister Daim Zainuddin, as executive director in the firm.
In early October last year, when LionGold shares were savaged, wiping out hundreds of millions in market value, the 36-year-old had had some 15 million shares in LionGold force-sold by banks.
This was somewhat perplexing from the onset, partly also because his father is still perceived to wield significant clout in Malaysian politics and holds sizeable business interests abroad.
As a result of the forced selling, Mr Wira's direct interests in the Singapore-listed junior gold miner went from 1.8 per cent to 0.15 per cent; his stake was bumped up to 0.2 per cent in January this year due to share options.
He retains a 4.5 per cent deemed interest in LionGold through Venaton Holdings, which is wholly-owned by ISR Capital.
In a response to queries from The Business Times, LionGold said: "In spite of the unfortunate events which led up to the forced selling of his shares, Datuk Wira remains positive on the prospects of LionGold's business."
LionGold added that he has also been appointed executive deputy chairman.
Interestingly, also on Monday, ISR Capital, a firm majority-owned by private equity firm Asiasons Capital - one of the trio hammered in the October saga - announced that Mr Wira had been redesignated as non-executive chairman and non-executive director, effective that day.
Asiasons joint managing director Jared Lim had last year said that the firm, which also owns 8 per cent of LionGold, plans to divest its holdings in ISR.
Mr Wira Dani emerged as substantial shareholder in ISR in 2012 - before December 2012, the firm was known as Asiasons WFG Financial - with the hope of restructuring and lifting the firm's waning financial position with new businesses.
In financial year 2013, ISR suffered a loss of $43.27 million from a $50 million impairment loss due to a significant decline in the fair values of quoted and unquoted investments.
Now, the concurrent moves involving Mr Wira in ISR and LionGold, both of which have Asiasons as a common shareholder, are an indication that the Malaysian businessman with interests in the power and coal sectors is being banked on to revive LionGold's sagging financials.
Referring to Mr Wira's resignation from ISR as executive director and his redesignation, LionGold told BT: "Henceforth, Datuk Wira does not hold executive positions on other boards and will focus his efforts on LionGold's operations."
The firm added: "He is currently formulating his plan for LionGold and, over time, as he assimilates with the group's day-to-day operations, he will be in a position to further comment on his ideas and strategies."
In another change, LionGold announced the resignation of Nicholas Ng as director and chief executive officer, citing medical reasons; this was largely expected, given that Mr Ng has been on medical leave.
Executive director Raymond Tan Soo Khoon will continue in his post as acting chief executive.
The sense of urgency to fortify the firm's business is hard to miss: The shine has come off LionGold, which, at its peak last August, had a market value of $1.6 billion, despite being in the red. Investors swooned at the sweet prospects of the company, which was aggressively picking up mining assets to reinvent itself.
Then, October happened and LionGold's shares were pummelled; what was once a gilded stock soon became a trade-with-extreme caution counter. Its market value stands at a humbling $154 million.
Yet, business needs to carry on. Referring to its plans to raise up to $39.70 million, the firm said on Monday that the sum will be largely used for its gold-mining operations. It will issue 37.3 million shares at 13.4 cents apiece to six individuals - Singaporean and Malaysian private investors and business individuals independently identified by the firm's directors.
The exercise will raise $5 million.
The firm also plans to issue two tranches of unsecured redeemable convertible bonds due in 2017: The first tranche, involving $15 million, will be subscribed by two private investors, Awang Ahmad Sah and Vigneswaran Subramaniam; LionGold's non-executive chairman Nik Ibrahim Kamil will subscribe to the second tranche of bond issues with a principal amount of $20 million.
Both bonds, which carry a 5 per cent a year interest rate, can be converted to shares at 16 cents a piece.
After the issue of subscription shares and full conversion of bonds into shares, LionGold's consolidated net tangible asset per share will fall to 25.13 cents from 27.49 cents as at end March 2013. Consolidated loss per share will change to 0.73 cents from 0.94 cents.
LionGold's shares finished 0.7 per cent lower at 14.9 cents yesterday. On Monday, the day of the announcement, the shares rose nearly 7 per cent.
The counter has gained some ground since its low of 9.1 cents on March 6. However, it is nowhere close to its dizzying peak of $1.725 last August.
In the meantime, the aftermath of October continues to be felt.
Quah Su-ling, executive director of Ipco International and one of several parties involved in lawsuits linked to the forced selling of LionGold shares, was recently ordered by the High Court to pay up a $1.83 million debt to the Bank of East Asia owed from a share-margin facility, The Straits Times reported. Her lawyer had argued that it was difficult for her to pay up because her assets have been frozen as a result of the lawsuits.
To paraphrase Xi JinPing, let's see if they have the political will to hunt the tiger down after swatting the flies

However IMHO I think all these people leads back to a Malaysia linked entity.

Do you think they are just the foot soldiers?

Soh and Lee were good friend from same Kumpung of Batu Pahat.

IIRC when Lion Gold first started being promoted by DMG, we asked them why they can acquire assets in Africa, answer was there was a well-connected Malaysian involved.

That is why I am not surprised that Malsysia linked brokers are involved. I am surprised that GS is involved. I'm wondering now who told GS to pull the plug. It would be interesting to see GS defence.

[greengiraffe]

PUBLISHED APRIL 08, 2014
Annica, Magnus hurt most by CAD probe
5 other firms linked to share trading probe also suffer price slump
BYANITA GABRIEL
anitag@sph.com.sg
PRINT |EMAIL THIS ARTICLE
Singaporoffices0804
True to the notion that probes are generally anathema to the investing community, investors also bolted out of the other counters which came under CAD's sweeping scrutiny involving eight firms - PHOTO: SPH
application/pdf iCONShares take a hit
SHARES of Annica Holdings and Magnus Energy Group were the worst hit yesterday, shedding between one-fifth and one-third in value, alongside losses in six other related counters involved in the share trading probe by Singapore's white-collar crime buster.
Both companies announced on Friday night that three top executives were questioned by the Commercial Affairs Department and their passports were impounded.
Annica, an investment holding company with business in the sale and trade of oil and gas equipment, tumbled 33 per cent to one cent. The counter resumed trading yesterday after an immediate trading halt in the late afternoon last Thursday.
The firm's chairman and executive director Edwin Sugiarto, who is also its majority shareholder, has had his passport impounded and is currently on police bail.
The CAD has also asked the firm and two subsidiaries to cough up all data and information from January 2011 to date belonging to Mr Sugiarto and its previous chief executive Lim Meng Check.
Magnus Energy, involved in a business similar to Annica's, fell 22 per cent to 1.4 cents. The passports of its executive director Koh Teng Kiat and chief financial officer Luke Ho Khee Yong were also impounded.
Here, unlike the other announcements by the firms involved in the probe so far, Magnus provided more details - it said that the two executives were told that there were reasonable grounds to believe they had committed false trading and market rigging offences under Singapore's securities laws.
Last week, the Singapore Police Force said the CAD and the Monetary Authority of Singapore were working jointly to investigate possible breaches of the Securities and Futures Act (Cap 289) arising from suspected trading irregularities in the shares of Asiasons Capital, Blumont Group and LionGold Corp.
True to the notion that probes are generally anathema to the investing community, investors also bolted out of the other counters which came under CAD's sweeping scrutiny involving eight firms.
All except one that is. ITE Electric's shares were untraded yesterday after closing at 4.2 cents on Friday. The Catalist-listed electrical distributor, shares of which generally see anaemic or no trading, announced that Ying Hwee Investments had picked up 109,000 shares for $4,578, bringing its stake up from 4.93 per cent to 5 per cent.
The other counters had a tough day. Ipco International fell 17 per cent to one cent; ISR Capital shed 15 per cent to 6.8 cents; Innopac Holdings fell 14 per cent to 1.2 cents; Blumont lost 13 per cent to 4.1 cents while LionGold slipped 4 per cent to 11.4 cents.
Innopac and Blumont were actively traded with 37 million shares and 33 million shares done, respectively.
"The penny stocks are looking rather lacklustre as a result of the CAD news. This could go on for awhile," said a remisier.

[greengiraffe]

AmFraser suing former client over trading debts

Brokerage seeks $1.89m repayment over losses from share meltdown What AmFraser's legal actions involve:
Published on Apr 10, 2014
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AmFraser's legal moves, which could be the first of many from local brokerages, come amid a sweeping investigation just launched by the authorities into the penny stock crash. -- ST FILE PHOTO

By Grace Leong

LOCAL brokerage AmFraser Securities is suing a former client for $1.89 million in trading debts run up in last October's penny stock crash.

AmFraser, which reportedly faced potential losses of up to RM120 million (S$46.6 million) after the crash, is seeking the funds from building firm executive Goh Cheng Yu.

But the brokerage has hit a roadblock in action it has initiated against five other clients who owe it about $4 million.

The legal moves, which could be the first of many from local brokerages, come amid a sweeping investigation just launched by the authorities into the scandal.

The shares of Asiasons Capital, LionGold Corp and Blumont Group rocketed to record levels last year before going into a tailspin, losing more than 90 per cent of value in a matter of days.

The crash wiped out about $8 billion in stock market value.

AmFraser is demanding that Mr Goh repays $1.89 million in trading losses racked up during the share meltdown.

Singapore Exchange filings show that Mr Goh is assistant project manager of Wee Hur Development, a wholly owned unit of construction group Wee Hur Holdings, in which his family is prominent.

Mr Goh said in court papers that he was not liable for the losses because the shares in Blumont, Asiasons and the International Healthway Corp - a firm not involved in the meltdown - were bought under his AmFraser trading account on Oct 2, 2013, "without his instruction, authorisation or knowledge".

He said the investments were allegedly made by Mr Heng Gim Teoh, an AmFraser trading representative.

Mr Goh claims Mr Heng admitted that he had not been authorised to carry out the investments and that he had increased Mr Goh's trading account limit without his clearance.

Mr Goh contends that AmFraser has "no basis to make any claim against him and that the brokerage failed to establish proper procedures to supervise Mr Heng".

AmFraser said in its court filings that Mr Heng is not an employee and was paid based on transactions conducted on behalf of his clients, including Mr Goh.

AmFraser's other legal move seems to have hit a roadblock in the form of court action taken by another party.

AmFraser is trying to recover about $4 million from five clients, including Blumont executive chairman Neo Kim Hock and Ms Quah Su Ling, chief executive of Ipco International, which owns 6.6 per cent of Blumont.

Mr Neo and Ipco International are helping the Commercial Affairs Department and the Monetary Authority of Singapore with their investigation into the share crash.

The other three targeted by AmFraser are Mr Tan Boon Kiat, a director of investment holding company JK Yaming International, Mr Lee Chai Huat and Mr Kuan Ah Ming.

Court papers filed by AmFraser last month said the five had engaged the brokerage to open trading accounts and provide dealing services.

"Due to various dealings made by (Interactive Brokers) on behalf of the (five), they are indebted to (AmFraser)," AmFraser said.

The broker alleges the five struck a deal last December to repay the $4 million but they had breached the agreement.

AmFraser's move to recover the money has stalled as the five customers are among eight people being pursued by Interactive Brokers for $79 million in trading losses from the meltdown.

Interactive, a global broking giant, had won a court order to freeze their assets.

AmFraser tried to get the High Court to vary this order but withdrew the action after Interactive's case went into arbitration.

The likely outcome is that AmFraser's action will be on hold until arbitration is completed.

gleong@sph.com.sg



What AmFraser’s legal actions involve:

1 It is demanding that building firm executive Goh Cheng Yu repay $1.89 million in trading losses racked up during last October's penny stock crash. Mr Goh is assistant project manager of Wee Hur Development.

2 It is trying to recover about $4 million from five clients, including Blumont executive chairman Neo Kim Hock and Ms Quah Su Ling, chief executive of Ipco International, which owns 6.6 per cent of Blumont.

[greengiraffe]

More and more dirt and somehow sgx trading system cannot detect abnormalities in trading throughout the entire saga...

http://www.todayonline.com/business/rbc-...stock-rout

RBC joins Goldman in suing clients after penny stock rout
PUBLISHED: APRIL 11, 4:13 AM(PAGE 1 OF 1) - PAGINATE
SINGAPORE — Royal Bank of Canada (RBC) is suing three private wealth clients in Singapore, joining companies including Goldman Sachs in seeking at least US$210 million (S$262 million) owed by customers after a stock rout in October last year.

Blumont Group’s Executive Chairman Neo Kim Hock and Executive Director James Hong, as well as businessman Nelson Fernandez owe the Canadian bank a total of US$63.3 million (S$79 million), said lawsuits filed in the Singapore High Court.

The men refused to pay after shares in companies such as Blumont, Asiasons Capital and LionGold, held as security, tumbled in the October crash, the bank said in court papers. This brings the total banks and brokers are seeking to recover from the crash to at least US$210 million.

The Monetary Authority of Singapore and the Commercial Affairs Department, Singapore’s central bank and white-collar crime agency, respectively, last week widened their probe into suspected stock-trading irregularities around the plunge of the three commodity companies.

Investigators are seeking electronic data from Mr Neo, Mr Hong and executives from six other companies.

About two dozen lawsuits have been filed by companies including Julius Baer Group, Bank of East Asia, Malayan Banking and AmInvestment Bank Group’s AmFraser Securities over the October crash.

RBC is seeking US$22.8 million from Mr Neo, US$17.8 million from Mr Hong and US$22.7 million from Mr Fernandez.

All three men applied to open accounts with the bank in April last year and had as much as US$30 million each in credit facilities, court papers said.

The bank’s lawsuit against Mr Hong “has no prospect of success” and should be dismissed because it is frivolous, Mr Hong said in his defence filed on March 21. Mr Neo and Mr Fernandez have not filed their defences.

Bank lawsuits against Mr Neo have locked up his remaining Blumont shares, causing Mr Alexander Molyneux, who has been appointed to succeed Mr Neo as Chairman, to abort a plan to buy 135 million shares of the company.

Mr Neo faces at least another three lawsuits over the stock crash. Coutts & Co and Interactive Brokers sued Mr Neo for a total of S$46.4 million.

Phillip Securities, Singapore’s biggest brokerage by clients, sued Mr Neo on Feb 24 after he refused to pay S$1.42 million.

Phillip Securities filed at least three other lawsuits on the same day, claiming it is owed a total of S$5.86 million by Mr Fernandez, Blumont shareholder Ooi Cheu Kok and Mr Lee Chai Huat, said court papers. The men have not filed their defences to the brokerage’s lawsuits.

BLOOMBERG