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PR Newswire
26-11-2013, 12:00 PM
FRANKIE HO, The Edge
25 November 2013
Ipco International CEO Quah Su-Ling is taking a unit of Goldman Sachs to court for losses suffered during the collapse of Asiasons Capital, Blumont Group and LionGold Corp early last month. According to legal papers filed on Nov. 20 with the High Court in the UNK and seen by The Edge Singapore, the case revolves around a loan that Quah took from the bank to buy shares in two of these companies.
Quah opened a private wealth management account with UK-incorporated Goldman Sachs International in February, with the intention of taking a loan to buy shares in LionGold. She was introduced to the bank by an investment consultant named William Chan, who heads a Singapore-based investment management firm.
Under the loan agreement with Goldman, Quah initially pledged three million Asiasons shares as collateral for the credit facility. She first invested in Asiasons in 2008, and became a shareholder of Blumont shortly afterwards.
With the money from Goldman, she proceeded to buy LionGold shares, which, together with her Blumont shares, were subsequently placed in her investment portfolio as collateral to extend her loan facility. As the amount and value of her LionGold shares grew over time, the size of her loan increased correspondingly. By Oct. 1, it had increased to more than $61m, from $12.4m at the time she became a Goldman client.
When Blumont announced in July that it planned to raise funds through a rights issue, Quah was told she could tap her credit line from the bank to subscribe for the rights shares. She agreed to take up her full entitlement to the rights issue on Oct. 1, using the loan from Goldman, and instructed the bank on the same day to proceed accordingly.
Abrupt U-turn
To her surprise, the bank called her on the morning of Oct. 2 to demand that she repay her entire loan in cash by 1.30pm the same day. It’s unclear why Goldman suddenly decided to pull the credit line. By 1.37pm that day, she was served a notice of default through an email stating she had failed to meet her obligations to the bank, which proceeded immediately to sell her shares in Asiasons, Blumont and LionGold. On Oct. 2, Goldman sold 1.2m of Quah’s shares in Asiasons at $2.79 each. The following day, it sold more of her shares in Asiasons, in two batches, at $2.7524 and $2.7144 apiece respectively.
In seeking to prevent more forced sales, Quah found a buyer on Oct. 3 for her shares in LionGold and Blumont. The next day, she informed Goldman about the buyer – Vicario Investments from Hong Kong – and instructed the bank to stop force-selling her shares.
Goldman continued, however, to offload her shares on the market. On Oct. 4, before the Singapore Exchange halted trading on the three counters an hour after the opening bell, the bank sold 292,833 of Quah’s shares in Asiasons for $2.4246 each and 230,667 LionGold shares for $1.2372 apiece. By the time trading was suspended that morning, shares of Asiasons, LionGold and Blumont were down to $1.04, $0.875 and 0.88 respectively.
Other casualties revealed
Around that time, Quah found out that Goldman had also issued a notice of demand to three other individuals seeking payment of their outstanding loans. They include James Hong, Blumont’s executive director; and Ng Su Ling, who resigned as Blumont’s independent director on Nov. 18. All three defaulted on their loan obligations, according to court documents filed by Quah’s lawyers.
Ng, too is taking legal action on her own against Goldman. She tells The Edge Singapore that she signed a margin financing agreement with the bank in June. “I have filed a claim form, which is akin to a writ in Singapore. That would mean the commencement of a lawsuit. Notice of commencement has been sent to their lawyers in Singapore.” Her case will also be heard in UK.
“I can only say at this point that the suit is in connection with agreements signed with Goldman Sachs International and Goldman Sachs Singapore. In relation to the particulars of the claim, I cannot give them to you at the moment because my solicitors are working on it. It is a personal suit,” says Ng who has hired a Queen’s Counsel and solicitors from Reynolds Porter Chamberlain LLP (RPC), a London-based corporate law firm. RPC, which has offices in the UK, Singapore and Hong Kong, is known for taking on cases involving professional negligence.
Quah, too, has engaged a Queen’s Counsel to fight her case. Court papers filed by her lawyers from London-based Wiggin LLP allege a breach of duty on the part of Goldman. A breach of duty occurs when one person or company has a duty of care towards another but fails to live up to that standard.
Among other things, Quah’s lawyers claim that the bank had “perversely and irrationally threatened” the dump her investments on the open market and had indeed acted on their word. Goldman had also refused to consent to Quah’s plan to sell her shares in LionGold and Blumont to Vicario Investments from Hong Kong, the lawyers allege.
Goldman continued to force-sell Quah’s shares after SGX lifted trading on the three counters on Oct. 7. By the end of the trading session that day, all three stocks had fallen substantially more – Asiasons closed at $0.15, LionGold at $0.25 and Blumont at $0.13. More forced sales were carried out by the bank over the following days.
Near the end of October, the Monetary Authority of Singapore said it would launch an investigation with SGX into the activities surrounding the three companies, and that the fallout of the crash had raised broader issues regarding the market’s structure and practices, which they intend to review and change if necessary. Around that time, the three companies called off or scaled down certain investments previously announced.
Suspicions addressed?
By the time the heavy selling of the three stocks early last month receded, Blumont, LionGold and Asiasons had lost more than $8b in combined market value. Now, as aggrieved investors are left licking their wounds, the lawsuits by Quah and Ng may shed some lights on how the entire saga came about, who some of the players behind the scenes were, and even address certain suspicions by investors.
Blumont disclosed in an SGX filing on Oct. 3, a day before the crash, that Ng sold one million shares for $2.38m on Oct. 2, paring her stake in the company to 3.01% from 3.07%. That meant the shares were sold at about $2.38 apiece, well above Blumont’s last traded price of $0.88 on Oct. 4, when SGX halted trading on the three counters barely an hour after opening bell. Many investors had taken the sale to mean she acted on insider information.
By Ng’s account, however, the sale was not her decision. “It wasn’t voluntary. It was due to forced selling,” she tells The Edge Singapore. Since then, she has had more of her shares forced-sold, not only in Blumont but also LionGold. Her current stakes in Blumont is about 1.7%. Her stake in LionGold is 0.19%.
Ng herself is a lawyer at a firm in Singapore that advises on dispute resolution and litigation matters. While she is no longer on the board of Blumont, she remains an independent director at LionGold. “I needed to concentrate on my legal practice. It was really a toss between Blumont and LionGold,” she says.
“Where Blumont is concerned, I figure that a lot of things are happening and I do not want to have to take leave every now and then from the board to concentrate on my personal matters. If I do that, things may not get done because we like to have all the independent directors agree and consent to whatever that company wants to do.”
Ng joined Blumont as an independent director in September last year, a few months before the company started acquiring assets in the minerals and energy resources sectors. With her departure, Blumont is short of one independent director. The company is looking for a replacement. Blumont’s incoming chairman, Alex Molyneux, told The Edge Singapore last month that the company will have a new management team and board of directors in due course.
“The company has to have a board with more experience in the sector. I’m the first guy with that,” said Molyneux, who used to be CEO of Toronto and Hong Kong listed SouthGobi Resources, a coal miner with operations in Mongolia. He will replace Neo Kim Hock as chairman once he completes a transaction to take a 5.2% stake in Blumont by buying shares from Neo and an unidentified investor at an indicative price of $0.40 a share.
Edward Naylor, Goldman’s Hong Kong based spokesman, declines to comment about the lawsuits, which come at a time when the bank is embroiled in a case with another investor in Singapore. Businessman Oei Hong Leong sued Goldman in September for allegedly giving misleading advice that cost him ¥3.18b ($39.5m) in losses on currency options. According to reports, Goldman has asked the High Court in Singapore to stop Oei’s lawsuit, saying that both parties should pursue private arbitration instead.
25 November 2013
Ipco International CEO Quah Su-Ling is taking a unit of Goldman Sachs to court for losses suffered during the collapse of Asiasons Capital, Blumont Group and LionGold Corp early last month. According to legal papers filed on Nov. 20 with the High Court in the UNK and seen by The Edge Singapore, the case revolves around a loan that Quah took from the bank to buy shares in two of these companies.
Quah opened a private wealth management account with UK-incorporated Goldman Sachs International in February, with the intention of taking a loan to buy shares in LionGold. She was introduced to the bank by an investment consultant named William Chan, who heads a Singapore-based investment management firm.
Under the loan agreement with Goldman, Quah initially pledged three million Asiasons shares as collateral for the credit facility. She first invested in Asiasons in 2008, and became a shareholder of Blumont shortly afterwards.
With the money from Goldman, she proceeded to buy LionGold shares, which, together with her Blumont shares, were subsequently placed in her investment portfolio as collateral to extend her loan facility. As the amount and value of her LionGold shares grew over time, the size of her loan increased correspondingly. By Oct. 1, it had increased to more than $61m, from $12.4m at the time she became a Goldman client.
When Blumont announced in July that it planned to raise funds through a rights issue, Quah was told she could tap her credit line from the bank to subscribe for the rights shares. She agreed to take up her full entitlement to the rights issue on Oct. 1, using the loan from Goldman, and instructed the bank on the same day to proceed accordingly.
Abrupt U-turn
To her surprise, the bank called her on the morning of Oct. 2 to demand that she repay her entire loan in cash by 1.30pm the same day. It’s unclear why Goldman suddenly decided to pull the credit line. By 1.37pm that day, she was served a notice of default through an email stating she had failed to meet her obligations to the bank, which proceeded immediately to sell her shares in Asiasons, Blumont and LionGold. On Oct. 2, Goldman sold 1.2m of Quah’s shares in Asiasons at $2.79 each. The following day, it sold more of her shares in Asiasons, in two batches, at $2.7524 and $2.7144 apiece respectively.
In seeking to prevent more forced sales, Quah found a buyer on Oct. 3 for her shares in LionGold and Blumont. The next day, she informed Goldman about the buyer – Vicario Investments from Hong Kong – and instructed the bank to stop force-selling her shares.
Goldman continued, however, to offload her shares on the market. On Oct. 4, before the Singapore Exchange halted trading on the three counters an hour after the opening bell, the bank sold 292,833 of Quah’s shares in Asiasons for $2.4246 each and 230,667 LionGold shares for $1.2372 apiece. By the time trading was suspended that morning, shares of Asiasons, LionGold and Blumont were down to $1.04, $0.875 and 0.88 respectively.
Other casualties revealed
Around that time, Quah found out that Goldman had also issued a notice of demand to three other individuals seeking payment of their outstanding loans. They include James Hong, Blumont’s executive director; and Ng Su Ling, who resigned as Blumont’s independent director on Nov. 18. All three defaulted on their loan obligations, according to court documents filed by Quah’s lawyers.
Ng, too is taking legal action on her own against Goldman. She tells The Edge Singapore that she signed a margin financing agreement with the bank in June. “I have filed a claim form, which is akin to a writ in Singapore. That would mean the commencement of a lawsuit. Notice of commencement has been sent to their lawyers in Singapore.” Her case will also be heard in UK.
“I can only say at this point that the suit is in connection with agreements signed with Goldman Sachs International and Goldman Sachs Singapore. In relation to the particulars of the claim, I cannot give them to you at the moment because my solicitors are working on it. It is a personal suit,” says Ng who has hired a Queen’s Counsel and solicitors from Reynolds Porter Chamberlain LLP (RPC), a London-based corporate law firm. RPC, which has offices in the UK, Singapore and Hong Kong, is known for taking on cases involving professional negligence.
Quah, too, has engaged a Queen’s Counsel to fight her case. Court papers filed by her lawyers from London-based Wiggin LLP allege a breach of duty on the part of Goldman. A breach of duty occurs when one person or company has a duty of care towards another but fails to live up to that standard.
Among other things, Quah’s lawyers claim that the bank had “perversely and irrationally threatened” the dump her investments on the open market and had indeed acted on their word. Goldman had also refused to consent to Quah’s plan to sell her shares in LionGold and Blumont to Vicario Investments from Hong Kong, the lawyers allege.
Goldman continued to force-sell Quah’s shares after SGX lifted trading on the three counters on Oct. 7. By the end of the trading session that day, all three stocks had fallen substantially more – Asiasons closed at $0.15, LionGold at $0.25 and Blumont at $0.13. More forced sales were carried out by the bank over the following days.
Near the end of October, the Monetary Authority of Singapore said it would launch an investigation with SGX into the activities surrounding the three companies, and that the fallout of the crash had raised broader issues regarding the market’s structure and practices, which they intend to review and change if necessary. Around that time, the three companies called off or scaled down certain investments previously announced.
Suspicions addressed?
By the time the heavy selling of the three stocks early last month receded, Blumont, LionGold and Asiasons had lost more than $8b in combined market value. Now, as aggrieved investors are left licking their wounds, the lawsuits by Quah and Ng may shed some lights on how the entire saga came about, who some of the players behind the scenes were, and even address certain suspicions by investors.
Blumont disclosed in an SGX filing on Oct. 3, a day before the crash, that Ng sold one million shares for $2.38m on Oct. 2, paring her stake in the company to 3.01% from 3.07%. That meant the shares were sold at about $2.38 apiece, well above Blumont’s last traded price of $0.88 on Oct. 4, when SGX halted trading on the three counters barely an hour after opening bell. Many investors had taken the sale to mean she acted on insider information.
By Ng’s account, however, the sale was not her decision. “It wasn’t voluntary. It was due to forced selling,” she tells The Edge Singapore. Since then, she has had more of her shares forced-sold, not only in Blumont but also LionGold. Her current stakes in Blumont is about 1.7%. Her stake in LionGold is 0.19%.
Ng herself is a lawyer at a firm in Singapore that advises on dispute resolution and litigation matters. While she is no longer on the board of Blumont, she remains an independent director at LionGold. “I needed to concentrate on my legal practice. It was really a toss between Blumont and LionGold,” she says.
“Where Blumont is concerned, I figure that a lot of things are happening and I do not want to have to take leave every now and then from the board to concentrate on my personal matters. If I do that, things may not get done because we like to have all the independent directors agree and consent to whatever that company wants to do.”
Ng joined Blumont as an independent director in September last year, a few months before the company started acquiring assets in the minerals and energy resources sectors. With her departure, Blumont is short of one independent director. The company is looking for a replacement. Blumont’s incoming chairman, Alex Molyneux, told The Edge Singapore last month that the company will have a new management team and board of directors in due course.
“The company has to have a board with more experience in the sector. I’m the first guy with that,” said Molyneux, who used to be CEO of Toronto and Hong Kong listed SouthGobi Resources, a coal miner with operations in Mongolia. He will replace Neo Kim Hock as chairman once he completes a transaction to take a 5.2% stake in Blumont by buying shares from Neo and an unidentified investor at an indicative price of $0.40 a share.
Edward Naylor, Goldman’s Hong Kong based spokesman, declines to comment about the lawsuits, which come at a time when the bank is embroiled in a case with another investor in Singapore. Businessman Oei Hong Leong sued Goldman in September for allegedly giving misleading advice that cost him ¥3.18b ($39.5m) in losses on currency options. According to reports, Goldman has asked the High Court in Singapore to stop Oei’s lawsuit, saying that both parties should pursue private arbitration instead.
