SINGAPORE - Various companies under CoAssets, a financial firm accused of misconduct by its clients, are being jointly investigated by the Commercial Affairs Department (CAD) of the Singapore Police Force and the Monetary Authority of Singapore (MAS) for possible offences under the Penal Code and the Securities and Futures Act.
In a statement issued on Monday (Feb 1), CAD and MAS said the joint investigation, launched on Jan 12, stems from complaints and feedback received from members of the public regarding suspected misconduct by CoAssets group companies.
Hundreds of CoAssets' retail investors were left reeling in early December amid media reports that the Singapore-based alternative lending platform had transferred US$30 million (S$39.9 million) of its borrowings to a little-known debt recovery firm Sunfits.
Aggrieved investors filed police reports against CoAssets' co-founders Getty Goh and Seh Huan Kiat, and grouped together on social media channels such as Telegram to pursue legal action.
MAS said last month that it will review and take necessary action if CoAssets' licensed subsidiary - CA Funding Pte Ltd (CAFPL) - had breached regulations. Of the CoAssets group companies, only CAFPL is regulated by MAS, as a capital markets services licensee.
In March 2020, MAS issued a direction to CAFPL to prohibit the company from listing new issuances, signing up new investors and accepting subscription of securities.
These directions were issued after MAS' inspection uncovered lapses in CAFPL's credit assessment process, inadequate disclosure of information to investors, and failure to address conflicts of interests arising from dealings that the CoAssets group companies had with entities related to issuers that CAFPL had listed on its platform.
MAS had also directed CAFPL to appoint an independent external auditor to review the effectiveness of its remedial measures to address these deficiencies.
According to the statement, CAFPL informed MAS in December 2020 that it had failed to comply with the minimum base capital requirement under the SFA and intended to cease operations.
As directed by MAS, all customers' moneys held by CAFPL have since been returned to investors, Monday's joint statement said.
MAS is closely monitoring CAFPL's implementation of its cessation plan to ensure that investors are treated fairly, the statement added.