Friday, April 4, 2014

Singapore Widens Stock-Trade Probe; Magnus, Innopac Drop

Singapore authorities widened their share-trading probe to include executives from two more companies as the police and central bank investigate a rout that wiped $6.9 billion of market value in October.

The Monetary Authority of Singapore and the Commercial Affairs Department, the white-collar crime unit of the police, are investigating trading in shares of Blumont Group Ltd. (BLUM), Asiasons Capital Ltd. and LionGold Corp. for possible breaches of the Securities and Futures Act, according to an April 2 statement.

Magnus Energy Group Ltd. (MAGE) and Innopac Holdings Ltd. (INN) said today they or their units are being asked to assist in CAD investigations, including supplying electronic data belonging to executives.

“This is the first time the regulators are doing it on such a big scale,” Lan Luh Luh, an associate dean at the National University of Singapore’s business school and deputy chairman of the Centre for Law and Business, said by phone.

“What Singapore is doing is reflective of what global regulators are doing.” Blumont, Asiasons and LionGold plunged at least 87 percent over three days in early October, spurring brokers to clamp down on margin lending and denting sentiment among Singapore investors.

All three commodity companies have said they don’t know what caused the declines. Stock trading in the city-state dropped 20 percent to a daily average of S$990 million ($784 million) in the three months ended Dec. 31 from a year earlier, data compiled by Bloomberg show.

Global Investigations

A multiyear crackdown on insider trading in the U.S. has led to at least 79 convictions of hedge-fund traders and others. At least a dozen regulators around the world are now investigating the $5.3 trillion-a-day currency market after Bloomberg News reported in June that traders colluded to rig benchmark rates.

New York Attorney General Eric Schneiderman has opened a broad probe into whether U.S. stock exchanges and alternative venues provide high-frequency traders with improper advantages. Shares of four of the five Singapore companies fell today, with Asiasons remaining in a trading halt.

LionGold tumbled 15 percent to 12.6 Singapore cents as of 3:50 p.m. in Singapore, heading for its biggest decline since Oct. 28.

Blumont dropped 2 percent after slumping 16 percent yesterday, while Innopac fell 6.3 percent before trading was halted and Magnus Energy sank 9.5 percent.

Electronic Data

Blumont’s G1 Investments Pte unit owns a 5.2 percent stake in Innopac, according to data compiled by Bloomberg.

The police asked G1 Investments to assist in its investigation, Blumont said in its statement yesterday. Investigators requested access to all corporate electronic data from Jan. 1, 2011 to date, information-technology equipment and data-storage devices belonging to Executive Director James Hong and Executive Chairman Neo Kim Hock, Blumont said.

Police made the same request for data belonging to Innopac Chief Executive Officer Wong Chin-Yong, according to a company filing today.

They’re seeking the same information from units of Magnus Energy relating to the company’s executive director Koh Teng Kiat and Chief Financial Officer Luke Ho Khee Yong, Magnus Energy said in a separate filing.

Ho worked at Asiasons WFG Financial Ltd. from October 2011 until June 2012, according to a Magnus Energy filing announcing his appointment. Asiasons WFG is a unit of Asiasons Capital.

Asiasons hasn’t received any notices or orders from government authorities to assist in the investigation and its business operations remain unaffected, the company said today.

The police also seeking data belonging to Lynne Ng Su Ling, a non-executive independent director of LionGold, and Peter Chen Hing Woon, a company employee, LionGold said in a filing.

bloomberg.com

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