April 9 (Bloomberg) -- Alexander Molyneux, chairman-designate of Blumont Group Ltd., one of three Singapore stocks whose trading is being probed by police and the regulator, dropped a plan to buy shares in the company because of lawsuits.
Molyneux won’t proceed with a purchase of 135 million shares in Blumont, the Singapore-based commodity trader said yesterday in a statement. The company said Oct. 7 that Molyneux will buy the stock from shareholders including Executive Chairman Neo Kim Hock. Blumont slid 4.9 percent to 3.9 Singapore cents at the close in Singapore. The stock plunged 98 percent through yesterday from a record S$2.45 on Sept. 30.
Neo was sued by Coutts & Co. in February to recover S$19.9 million ($16 million) after a plunge in the value of his shares in Blumont, Asiasons Capital Ltd. and LionGold Corp. held as collateral, according to a lawsuit filed in the Singapore High Court. A slump in the three companies erased $6.9 billion of market value in October. The Monetary Authority of Singapore and the police are jointly investigating suspected trading irregularities, the regulator said last week.
“Neo was the main provider of the shares and his shares are in locked up in dispute with the banks,” Molyneux said yesterday in a phone interview. “There’s no point of dragging this on forever.”
Neo didn’t respond to two e-mails seeking comment. Blumont said today in response to Bloomberg queries it’s “unable to comment on ongoing matters relating to Mr. Neo’s private shareholdings that have led to this development.”
The company “will consider the latest developments and seek to meet up with Mr. Molyneux to make a decision regarding his position as chairman-designate, as soon as possible,” Blumont said yesterday in the statement.
The police asked Blumont’s G1 Investments Pte to assist in a probe into potential offences under the Securities & Futures Act, according to an April 2 company filing. Investigators requested access to all corporate electronic data from the start of 2011 to date, information-technology equipment and data-storage devices belonging to Neo and Executive Director James Hong, Blumont said.
The completion of Molyneux’s investment in Blumont has been deferred twice, according to Blumont. The deal was originally scheduled to be completed in November. The commodity trader gave no reason for Molyneux canceling the transaction in yesterday’s statement.
Molyneux remains a consultant and key adviser to the company’s board, according to yesterday’s statement. Molyneux was ousted as CEO of coal miner SouthGobi Resources Ltd. in September 2012 after Aluminum Corp. of China Ltd. dropped a takeover bid. The offer was withdrawn after Mongolia passed a law restricting foreign state-owned companies from controlling key assets.
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