Police impound passports of top executives amid penny stock crash probe

 The entrance of LionGold Corporation office at Central Plaza. The police have impounded the passports of at least three corporate executives as they continue to probe into last October's penny stock crash. -- ST FILE PHOTO: DESMOND FO
 The entrance of LionGold Corporation office at Central Plaza. The police have impounded the passports of at least three corporate executives as they continue to probe into last October's penny stock crash. -- ST FILE PHOTO: DESMOND FOO

The police have impounded the passports of at least three corporate executives as they continue to probe into last October's penny stock crash.

Two of the men have even been told that there are reasonable grounds to believe that they have committed false trading and market rigging offences under Singapore's securities laws.

The Commercial Affairs Department (CAD) and the Monetary Authority of Singapore disclosed last week they are probing suspected trading irregularities in the stock of Asiasons Capital, Blumont Group and LionGold Corp, adding that the Securities and Futures Act (SFA) may have been breached.

The shares of the trio rose between 40 and 160 per cent in August and September last year, but then plunged between 91 and 96 per cent over a few days in October, knocking off more than $8 billion in market value combined.

Blumont and LionGold said last week that they were asked to provide electronic data and data storage devices belonging to some of their executives and directors, although Asiasons said it has not been asked to assist.

However, the probe quickly expanded to include other companies, and as of last Friday the probe has reached at least eight companies and 13 individuals.

Late on Friday, company announcements show that police have already begun to impound passports and forced some individuals to post bail.

Magnus Energy Group said that its executive director Koh Teng Kiat and chief financial officer Luke Ho Khee Yong have had their passports impounded.

It added that the police had told them that it had "reasonable grounds" to believe they have each committed an offence under the section of the SFA that outlaws false trading and market rigging.

Mr Koh and Mr Ho were asked to provide the CAD with records of their stock trades and details of accounts held with financial institutions. They were also asked to provide personal and corporate electronic data, and have been interviewed by the CAD.

"Until such time that the outcome of the investigations is known, Mr Koh and Mr Ho shall continue to serve the company in their respective capacities," said Magnus Energy.

Another individual to have his passport impounded is Mr Edwin Sugiarto, chairman and executive director of Annica Holdings.

He is out on police bail after being interviewed by CAD officers in relation to the investigations.

"The authorities appear to be making an effort to show that they take suspected market offences seriously and will spare little effort in conducting a thorough investigation," said corporate lawyer Adrian Chan.

The companies called up to assist the CAD are connected via a web of cross holdings and common directors with the three stocks that had fallen sharply: Asiasons, LionGold and Blumont.

Annica's Mr Sugiarto was a substantial shareholder of Australia-listed Merlin Diamonds, a firm which Innopac tried to take over in mid-2013.

Innopac's chief executive Wong Chin-Yong has been asked to assist the CAD in the investigations. The company counts Blumont as a shareholder.

Innopac's Mr Wong also held shares in Annica as at March 28, 2013, although it is unclear if he still holds the shares.

As for Magnus Energy, it is a shareholder of LionGold.