Shares of ISR Capital kept falling yesterday after it emerged an executive director and major shareholder had resigned and may have breached a moratorium by selling some shares on the open market.
In a Singapore Exchange filing on Wednesday, the firm said Mr David Francis Rigoli had resigned on Monday, following a disagreement with the board.
Mr Rigoli, who was responsible for overseeing and managing the group's investment in the exploration and development of rare earth elements, alleged the firm had not paid his salary for last month.
He had been appointed to the position in May last year.
As a result of the pay dispute, Mr Rigoli gave notice that, with effect from Monday, he would be withdrawing the undertaking he had previously provided on not selling or transferring his shares.
The board countered that he "is not in a position to unilaterally terminate the deed of undertaking" without the agreement of the company, adding he has "breached the terms of the deed of undertaking" as he had sold some of the shares on Monday.
It added that it would be seeking legal advice. He had sold more than 21 million shares at a price of 4.7 cents a share. The counter was trading at 2.2 cents yesterday, a fall of almost 26 per cent from a day earlier.
Following the transaction, Mr Rigoli still holds more than 26 per cent of the company's shares, down from 27.43 per cent. He remains the single largest shareholder of ISR.
He also accused the board of failing to act in accordance with its duties after he questioned the "appropriateness of the appointment" of the company's previous legal adviser, whose appointment puts it in a position of conflict.
ISR's board said it considered the allegations baseless, adding that it had requested Mr Rigoli to provide evidence of his allegation, but has not received any evidence.
The firm's woes began after there were disclosures in court on Feb 28 that the stock may have been manipulated by alleged penny stock crash mastermind John Soh Chee Wen.
Investigators found some trading accounts linked to Soh were "involved in pushing up or maintaining ISR shares", which had rocketed around 2,800 per cent between May and November last year.
Soh was arrested on Nov 24.
The stock was suspended on Nov 27 last year and resumed trading on Monday when it plunged 69 per cent to 8.7 cents.