They are demanding answers from the Securities Industry Council (SIC), which allowed the takeover to be cancelled last weekend, leaving the six holding shares that were facing a price meltdown.

Like the Omni Partners hedge fund, they snapped up millions of Jade shares at 22 cents apiece recently, fully expecting to sell them to Dr Anthony Soh, who made a buyout offer for 22.5 cents.

Dr Soh, a Jade director, already held 45.97 per cent of the firm and needed only a small number of acceptances to get over the 50 per cent line.

The six investors held more than 30 million shares, or 3 per cent. They gambled that if they sold their shares to Dr Soh, he would almost be at 50 per cent, needing only a few more acceptances.

Once at 50 per cent, Dr Soh would have to pay all those who accepted the offer. If he failed to get enough acceptances to cross 50 per cent by the Monday deadline, he would have to return the shares.

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It seemed to the six investors that they had a cast-iron buyer for their 30 million shares, with a profit of half a cent on each one. That would mean a gain of $150,000 - and a return of about 2.2 per cent, in the space of just a few weeks, far higher than the interest from a fixed deposit.

A sure thing, however, became a lost cause on Tuesday last week when Dr Soh told the Singapore Exchange (SGX) that he, in fact, held just 16.06 per cent of Jade and no longer had the resources to complete the buyout.

He had pledged about 300 million Jade shares to Australian broker Opes Prime as collateral for a loan to partly finance the buyout. Opes, however, went into receivership on March 27, and the stock was seized by the company's creditors, ANZ Bank and Merrill Lynch.

Trading in Jade shares was halted on Wednesday last week. On Saturday, the SIC allowed Dr Soh to call off the takeover.

Trading then resumed on Monday, triggering a frenzy, with investors dumping Jade and sending its share price plunging from 22 cents to 6.5 cents, with 156 million shares changing hands.

That left the six investors in the red by about $5 million.

One paid in cash for his stake.

'I bit the bullet on Monday and sold the shares. This is the first time I have seen something like this happen. Surely, there should be a moral responsibility on the part of the offeror to declare that his shares had been pledged,' he said.

His friend and fellow investor, known only as Mr Tay, is querying the role of OCBC Bank. As the buyout's adviser, the bank confirmed that Dr Soh could complete the deal. OCBC resigned the post on Tuesday.

'How can we trust offer documents anymore?' asked Mr Tay.

The investors were even more annoyed after Jade announced yesterday that Merrill Lynch had just disclosed that it seized 256.84 million Jade shares - equivalent to a 26.49 per cent stake in the company - on March 27, the day Opes went into receivership.

This was four trading days before Dr Soh told the SGX about his difficulties.

An announcement yesterday added that Merrill sold 95.3 million shares, or 9.8 per cent, on Tuesday last week, just before the trading halt and when Jade shares were still at 22 cents.

The investors are angry that these transfers and sales were allowed to occur without the public being told.

Merrill's holding made it a substantial investor of Jade, which should have been disclosed within two working days to Jade, which should have then made an announcement on the SGX'S website.

Merrill declined to comment yesterday.

Jade shares jumped 58.3 per cent yesterday from six cents to 9.5 cents, with a staggering volume of 269 million traded.

Omni Partners was in a similar position. It bought 49 million shares at 22 cents last Monday also with the aim of selling them to Dr Soh for 22.5 cents. It is not known if it has since sold its stake.

sushyan@sph.com.sg

QUESTION OF RESPONSIBILITY

'I bit the bullet on Monday and sold the shares. This is the first time I have seen something like this happen. Surely, there should be a moral responsibility on the part of the offeror to declare that his shares had been pledged.'

AN INVESTOR who paid cash for his stake.

MATTER OF TRUST

'How can we trust offer documents anymore?'

FELLOW INVESTOR, known only as Mr Tay, querying the role of OCBC Bank as the buyout's adviser. The bank confirmed that Dr Soh could complete the deal. It resigned on Tuesday.