An act of desperation has felled the top executive of a mainboard-listed company.
The Monetary Authority of Singapore (MAS) has taken civil penalty action against Mr Ang Choon Cheng, chief executive officer of Natural Cool Holdings, for false trading and share price manipulation.
He paid a civil penalty of $150,000 to the MAS to avoid court action, the regulator said in a statement.
Mr Ang had borrowed money from banks by pledging his shares in the company as collateral.
However, the onset of the global financial crisis in 2008 caused Natural Cool share price to tank.
As a result, he faced margin calls from the banks. His options were to either repay some of the loans or top up his collateral to meet the borrowing requirements.
Instead, he bought Natural Cool shares in an artificial attempt to prop up the share price.
He did this on 35 days between Jan 9, 2008 and June 16, 2009.
As a result of the purchases, the thinly-traded stock closed as much as 12 bids or 30 per cent above the preceding traded price.
Through his actions, Mr Ang intended to create, and created a false or misleading appearance with respect to the price of Natural Cool shares, said the MAS.
He had carried out the purchases, as well as two sale transactions in Natural Cool shares, using the securities trading accounts of two other persons with the same brokerage house.
Mr Ang's actions had deceived the brokerage house into believing that the purchases and sales were for the benefit of the respective account holders when he was in fact the beneficial owner of those trades.
The MAS noted that he had cooperated fully with the regulator over the investigation.
Mr Ang resigned as a director and CEO of Natural Cool on Oct 31.
He has also given a voluntary undertaking to the MAS not to be a company director for a period of one year with effect from Oct 31.