SGX reprimands Magnus Energy’s ex-CEO and directors for breaching listing rules

SINGAPORE - The Singapore Exchange (SGX) has issued a public reprimand to the former chief executive officer of Magnus Energy Group, Mr Luke Ho Khee Yong, and the former board of directors for breaches of the Catalist rules.

The four board directors taken to task are: former independent director and chairman Kushairi Zaidel, former independent directors John Ong Chin Chuan and Seet Chor Hoon, and former non-independent non-executive director Ong Sing Huat.

The reprimand for the five came from the SGX Listings Disciplinary Committee (LDC) in connection with two transactions.

The first involved the disposal of nine million shares in GCM Resources through Magnus Energy’s wholly owned subsidiary, MEG Global Ventures.

The LDC said Magnus Energy’s announcements in March and June 2017 failed to disclose relevant key details, including the fact that the disposal was related to the GCM Resources shares, the identity of the counterparty, the number of GCM Resources shares sold, as well as the aggregate value of the disposal consideration.

Further, another announcement in October 2018 disclosed contradictory information about whether the GCM Resources shares had been sold, or if the sale was ongoing, with the shares held in trust by a trading firm.

In a resolution agreement submitted to the LDC, Mr Ho and the former board admitted to failing to ensure that the company had in place a robust and effective system of internal controls on matters concerning the transaction.

The second transaction in breach of listing rules involved the acquisition of a convertible loan from Revenue Anchor pursuant to a deed of assignment between Revenue Anchor and MEG Global Ventures.

Revenue Anchor, as the lender to GCM Resources for an outstanding convertible loan of £510,000 (S$844,000), was to assign to MEG Global Ventures the benefits of the convertible loan. This included the right to convert the outstanding balance of the convertible loan into shares in GCM Resources.

The funds raised from the convertible loan was for GCM Resources to fund its major asset, the Phulbari coal mine project in Bangladesh.

In this case, Mr Ho and the former board admitted to failing to ensure that the company disclosed that a condition precedent for the deed – that of obtaining consent from GCM Resources for the assignment of debt – had not been met.

Among other things, the five also failed to ensure the company disclosed that GCM Resources lacked the requisite regulatory permits to commence coal production at the Phulbari coal mine.

It was necessary for the board to disclose these details to avoid the establishment of a false market in the company’s securities, SGX said.

Apart from the reprimand, the LDC has also required Mr Ho to provide a signed written undertaking to SGX that he would not seek directorship on the board of directors, or a role as a key executive officer of issuers whose securities are listed on the SGX for two years from March 13, 2023.

The four members of the former board have been asked to provide signed written undertakings to SGX that they would not seek directorships on the board of directors, or key executive roles in SGX-listed companies for a year.

Magnus Energy was one of the companies linked to penny stock crash mastermind John Soh Chee Wen.

Soh was linked to Mid-Continent Equipment Group, an oil industry equipment supplier – majority-held by Magnus Energy – that was the subject of a share-manipulation scheme.

THE BUSINESS TIMES