April 3, 2014 / 12:50 AM / 5 years ago

CORRECTED-UPDATE 2-Singapore probes companies at centre of penny-stock crash

(Corrects title of Alexander Molyneux to Blumont’s chairman-designate)

* Blumont, LionGold, Asiasons lost $6.35 billion market value in October

* Authorities investigating possible breach of securities act

* Police contact Blumont, LionGold

SINGAPORE April 3 (Reuters) - Singapore’s police force and central bank are investigating suspected trading irregularities in companies at the centre of a penny-stock crash last year, the Monetary Authority of Singapore said late on Wednesday.

Share prices in Blumont Group Ltd, LionGold Corp Ltd and Asiasons Ltd crashed last October, wiping out around S$8 billion ($6.35 billion) in market value in just two days after huge run-ups. The scandal led to a series of proposed reforms to the city-state’s stock trading rules.

The central bank said it is now working with white collar crime police unit the Commercial Affairs Department (CAD) on possible breaches of the Securities and Futures Act related to trading in those three stocks.

Blumont earlier on Wednesday said its subsidiary, G1 Investments, had been contacted by the CAD and asked for all corporate electronic data from January 2011 relating to its executive chairman, Neo Kim Hock, and executive director James Hong.

In a statement to Singapore’s stock exchange Blumont, which mainly invests in mining assets, said the investigation is in relation to an offence under the Securities and Futures Act without giving any further details. Hong has also been asked to assist the CAD directly, it said.

No information was immediately available from the police.

LionGold in a statement said its subsidiary, LionGold Investments Pte Ltd, and the company has been informed by the CAD of a similar investigation.

LionGold has received a notice from the CAD on corporate data belonging to Lynne Ng Su Ling, a non-executive, independent director of LionGold, and Peter Chen Hing Woon, an employee.

The CAD’s notice requires LionGold to provide all corporate electronic data of Ng and Chen from January 2011 to now, the company said.

“CAD has not given any further details of its investigations. So far, the board is not aware if any offence has been committed and has not heard from Lynne Ng Su Ling or Peter Chen Hing Woon in respect of the investigations,” LionGold said. The company could not be reached by Reuters for further comment.

In their separate statements, both Blumont and LionGold said their businesses and operations are not affected by the investigations and will continue as normal.

Blumont’s chairman-designate, Alexander Molyneux, said the company was not able to comment further on the matter.

Asiasons has not released any statement on the matter.

Another Singapore company, Magnus Energy Group Ltd , late on Wednesday said two of its subsidiaries and one former subsidiary have also been asked to help the CAD with investigations. Magnus Energy is a shareholder in LionGold, according to Thomson Reuters data.

The company said its business and operations are not affected by the investigations. It could not immediately be reached for comment by telephone.

$1 = 1.2591 Singapore dollars Reporting by Rachel Armstrong, Anshuman Daga and Andrew Toh; Editing by Matt Driskill, Elaine Hardcastle and Christopher Cushing

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