The police's white-collar crimes unit has started investigating the trading activity of the three stocks involved in last October's dramatic penny share meltdown.
The Commercial Affairs Department (CAD) will work with the Monetary Authority of Singapore (MAS) as they probe suspected trading irregularities in the stock of Asiasons Capital, Blumont Group and LionGold Corp, CAD and MAS said in a joint statement on Wednesday.
The Securities and Futures Act (SFA) may have been breached, the statement noted.
Investor confidence in penny stocks was decimated by the wild price swings in Asiasons, Blumont and LionGold last year. The shares jumped between 40 and 160 per cent in August and September last year, before plunging between 91 and 96 per cent over a few days in October.
Investors struggled to find explanations for the rises and the subsequent falls. The Singapore Exchange took the rare step of slapping trading suspensions on the three counters when the plunge started. And when the suspensions were lifted, the three counters were named "designated securities", with certain trading restrictions on them.
Now the investigation has moved to authorities with legal powers to decide if any laws may have been broken amid the trading activity of the shares.
Blumont said on Wednesday that its wholly-owned subsidiary G1 Investments has been asked to help with the CAD's investigations.
The CAD has requested access to all corporate electronic data dating back to Jan 1, 2011, information technology equipment and data storage devices belonging to executive chairman Neo Kim Hock and executive director James Hong Gee Ho.
Mr Hong has been requested to assist the CAD in its investigations into a possible infringement under the SFA and he has indicated that he will cooperate fully, said Blumont.
LionGold said the CAD has asked it to provide all corporate electronic data, information technology equipment and data storage devices belonging to Ms Lynne Ng Su Ling and Mr Peter Chen Hing Woon, dating back to Jan 1, 2011.
Ms Ng is a non-executive, independent director of LionGold and Mr Chen is an employee.