Singapore authorities’ multi-year probe into suspected disclosure offences of Noble Group is at an “advanced stage”, and is expected to “reach a conclusion” in 3Q this year, says the Monetary Authority of Singapore.
Up till 2015, Noble was a high-flying Hong Kong-based, Singapore-listed commodities player. It came under short-selling attacks as questions were raised over the valuation of its assets.
By the time Noble caved and defaulted, its share price had collapsed by 99%. In 2018, it was delisted from the SGX, leaving a mark on founder and chairman Richard Elman, who used to be a scrapyard worker. Elman is 82 years old this year.
Noble tried to restructure its remaining assets into another entity and list the new entity elsewhere but the move was blocked by SGX and MAS.
“This followed a review which found that there were significant uncertainties about the financial position of the restructured entity,” says MAS in its enforcement report for the period July 2020 to Dec 2021, released on April 27.
Noble’s progress update was among the four major ongoing cases provided by MAS in this latest enforcement report.
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Hyflux, Eagle and nickel
The other three progress updates are on former market darling water treatment company Hyflux; Eagle Hospitality Trust, a stapled trust that defaulted within months of its listing, as well as Hui Xun Asset Management, which was involved in the alleged nickel-trading scam perpetrated by one Ng Yu Zhi.
For Hyflux, its current and former directors – including high-profile founder Olivia Lum – are facing “ongoing” investigations for possible offences under the Securities and Futures Act as well as non-compliance with accounting standards.
The probe was launched on June 2 2020, with a focus on Hyflux’s disclosure, accounting and auditing issues concerning the Tuaspring Integrated Water and Power Project, which saddled Hyflux with loans it couldn’t pay, hurting retail investors of its perpetual securities. “We are currently working closely with the Attorney General’s Chambers to review the evidence,” says MAS.
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Eagle Hospitality Trust listing on the SGX back in 2019 rode on a wave of investors’ appetite for REITs and business trusts. EHT’s assets include a portfolio of hotels in US as well as rights to use a defunct ocean liner, Queen Mary, which was sold into EHT at a valuation of US$159 million.
Various entities under EHT began to default on their loan obligations.
EHT’s current and former Singapore-based directors were arrested on Oct 1 2020 and released on bail. EHT is suspected to have breached disclosure requirements and listing rules.
Two US-based individuals, Howard Wu and Taylor Woods, are behind EHT’s sponsor, an entity known as Urban Commons. They were also EHT directors. “We have also sought assistance from relevant foreign authorities,” says MAS, without elaborating.
The investigation on EHT commenced on June 5 2020, following a referral by SGX RegCo, the frontline regulator for listed entities here. “In view of the number of suspects and the complex issues involved, investigations are still ongoing,” says MAS.
The fourth progress update is related to Ng Yu Zhi, a director of Envy Asset Management and Envy Global Trading. Ng faces a growing list of cheating charges for allegedly running a nickel trading scam.
Among others, Ng allegedly cheated Envysion Wealth Management (renamed Hui Xun Asset Management) and its CEO Shim Wai Han as well as Finian Tan, CEO of Vickers Partners, a venture capital firm with two of its funds under management invested in the scheme.
MAS is looking into Hui Xun and Vickers Partners to ascertain if there had been governance or risk management failures in their conduct of business. “Investigations are ongoing,” says MAS.
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Priorities, penalties
“MAS has continued to take robust enforcement actions against errant firms and individuals so as to safeguard the integrity of our financial sector,” says Peggy Pao, MAS’ executive director (enforcement).
“We have also proposed legislative changes to enhance our effectiveness in addressing financial misconduct. We will continue to improve our processes to uphold Singapore's reputation as a trusted financial centre that takes a tough approach to financial crime and misconduct,” she adds.
Elsewhere in the report, MAS says that for the period from July 2020 to Dec 2021, it has imposed $2.4 million in composition penalties for AML/CFT control breaches and $150,000 in civil penalties. 20 prohibition orders were issued against “unfit representatives”.
In the same period under review, MAS, together with the Attorney-General’s Chambers, have successfully secured the criminal convictions of seven individuals for market misconduct or related offences.
For the 2022 to 2023 period, MAS has identified a few priorities. First, MAS wants to enhance the effectiveness in pursuing breaches of corporate disclosure requirements, including through close collaboration with key regulatory and enforcement partners.
Next, MAS wants to step up its focus on corporate finance advisory firms and fund management companies that fail to comply with business conduct requirements.
Thirdly, MAS is studying options for enhancing investors’ recourse for losses due to securities market misconduct and last but not least, to strengthen the focus on holding senior managers accountable for breaches by their FIs or subordinates.
