SINGAPORE (THE BUSINESS TIMES) - For fear of having his reputation sullied by the falling price of Gaylin Holdings (now Amos Group) which he had recommended to investors, a former director of an investment firm and a corporate advisory firm bought shares in the counter to artificially prop up the closing price.
Wong Leon Keat rigged the market for the mainboard-listed oil and gas player on 17 occasions between November 2015 and October 2016, the court heard last Thursday (Feb 11).
Gaylin's share price had been on a downward trajectory - declining from $0.60 in 2014 to slightly above $0.15 in 2016. Wong decided to manipulate the prices to protect his reputation and preserve investors' confidence in him, as the 45-year-old had in his personal capacity recommended Gaylin placement shares to numerous investors.
He pleaded guilty to a total of seven charges of market manipulation and one count of using an investor's securities account to trade. Another 11 similar offences will be taken into consideration when the judge sentences him on March 12.
Wong was also the managing director and chief corporate officer of Catalist-listed air-conditioning company Natural Cool but he stepped down in January last year, shortly before he was charged with these offences.
The court heard that the accused purchased 100 shares to 200 shares each time in the highly illiquid Gaylin counter at the best ask price during trading hours and also placed buy orders to raise the closing price during the six-minute closing routine after trading stopped for the day.
Consequently, he had led to Gaylin shares closing 6.5 per cent to 38.6 per cent higher.
The prosecution asked for an imprisonment of 16 weeks to 20 weeks as well as a fine of $40,000, whereas Wong's lawyer Lee Teck Leng sought a fine of $160,000.
Mr Lee argued that the culpability of Wong was at the "lowest end", given that he had entered the trades in only small quantities at the then prevailing lowest asking price from genuine sellers, there was therefore "no real distortion" to Gaylin share prices.
He further said that the accused had not benefited financially from the offences as he did not sell any Gaylin shares, and neither had he caused losses to other investors as the share price had in fact risen.
The prosecution rebutted that the accused had more than seven million Gaylin shares and his investment holding firm Rhodus Capital held 12.3 million Gaylin shares, and therefore a higher Gaylin price would give his portfolio a higher market value. Further, it argued that the defence has not produced any authorities to substantiate the proposition that trades with genuine counterparty are less aggravating.
Market rigging offences distort the information reflected in the market, contrary to what the defence said that there was no real distortion to Gaylin prices, retorted the prosecution.
Amos shares closed flat at $0.02 on Monday.
