The Singapore Exchange (SGX) has issued a "trade with caution" warning on ISR Capital - after it was disclosed in court on Tuesday that the stock may have been manipulated by the same man who masterminded the 2013 penny stock crash.
John Soh Chee Wen, a Malaysian businessman, is under investigation by the authorities for allegedly manipulating the share price of ISR, and involving himself in the management of the investment firm's affairs as an undischarged bankrupt and while under police bail.
Investigators found that some trading accounts linked to Soh were involved in ISR shares skyrocketing 2,800 per cent between May and November last year. Soh was arrested on the morning of Nov 24, and ISR shares crashed 55 per cent in the hours that followed, before the company called for a trading halt at 2.32pm.
SGX suspended the trading of ISR shares three days later, "to safeguard the interest of the market as there were circumstances that prevented trading in ISR shares on an informed basis", it said. SGX will lift the suspension at 9am next Monday.
The "trade with caution" measure was introduced by the SGX in the aftermath of the penny stock crash in 2013, when three stocks - Asiasons Capital, Blumont Group and LionGold Corp - lost most of their market value over just three days. The counters had surged between 150 and 800 per cent in less than nine months before the inexplicable crash, and retail investors gawked as more than $8 billion in market value was wiped out.
On Nov 25 last year, Soh was one of the three individuals charged in the State Courts for manipulating the market for the shares of Asiasons (now known as Attilan Group), Blumont and LionGold, between August 2012 and October 2013.
Meanwhile, ISR is still trying to convince SGX to allow it to acquire a 60 per cent stake in a firm that holds a mining concession for a rare earth oxide resource in Madagascar.
Executive chairman Chen Tong, who is also a former managing director of a subsidiary of China's Bao Steel Group, said on Dec 7 last year that ISR would commission a third independent report by a qualified valuer to address remaining issues raised by SGX concerning the Madagascar asset.
ISR yesterday reported a net loss of $8.3 million, reversing from a profit of $667,519 previously.
Revenue for the 12 months ended Dec 31 slumped by 88.3 per cent to $349,661.