The Monetary Authority of Singapore and the police department are jointly investigating suspected trading irregularities in commodity companies including Blumont Group Ltd. (BLUM), Asiasons Capital Ltd. and LionGold Corp. that together erased $6.9 billion in market value in early October.
The companies are being probed for possible breaches of the Securities and Futures Act, according to a statement on the website of the Singapore regulator.
Blumont shares plunged as much as 22 percent to 4.5 Singapore cents, before closing 16 percent lower at 4.9 Singapore cents, the biggest one-day decline since Dec. 4. The drop came as the stock resumed trade after a company statement. LionGold fell 0.7 percent before the shares were suspended, while Asiasons declined 9.4 percent.
The Commercial Affairs Department, which investigates white-collar crime, asked Blumont unit G1 Investments Pte Ltd. to assist in its investigation into an alleged offence under the SFA, Blumont said in its statement. The police request included access to all corporate electronic data from Jan. 1, 2011 to date, information-technology equipment and data-storage devices belonging to Executive Director James Hong and Executive Chairman Neo Kim Hock, Blumont said.
Hong has been requested to assist the police in the investigation and he has indicated that he will cooperate, Blumont said. Blumont’s business operations aren’t affected by the probe, the company said.
Neo was sued by Coutts & Co. in February as the wealth-management unit of Royal Bank of Scotland Group Plc sought to recover S$19.9 million ($15.8 million) after his shares in Blumont, Asiasons Capital Ltd. (ACAP) and LionGold, held as collateral, fell in the selloff, according to a lawsuit filed in the Singapore High Court.
Shares of the three commodity companies plunged at least 87 percent over three days in early October, prompting the regulator to review their trading. The central bank and the Singapore Exchange proposed trading restrictions in February including the imposition of minimum collateral on investors trading both Singapore and overseas-listed shares.
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