Lawsuits shine light on Goldman’s role in Asiasons, Blumont and LionGold crash

[dydx]

The way I see it - these few so-called smart insiders became too greedy and speculative, and decided to borrow big time but from the wrong banks (including Goldman Sachs) and other lenders (possibly including even stockbrokers) to fan the market and drive the share prices higher, and now ended up losing big time and including the companies they have tried to build as well as their reputation. I doubt by taking legal action against GS and possibly other lenders would help them to save the day.

[orangetea]

Third penny stock case against Goldman

Blumont director says bank breached duty by force-selling his shares

Published on Nov 27, 2013

By Rachel Scully

ANOTHER shareholder caught in the trading debacle over the Blumont Group, LionGold Corp and Asiasons Capital penny stocks is suing global bank Goldman Sachs.

Mr James Hong claims the bank, which had given him a credit facility of more than $64 million, breached its duty of care when it force-sold his shares in the three firms last month.

He is the third person to take legal action against the bank.

Ipco International chief executive Quah Su-Ling and LionGold independent director Ng Su Ling, who is also Ipco's company secretary, have both commenced legal proceedings.

Recent media reports said Ms Quah had loans in excess of $61 million with Goldman Sachs.

Singapore-based Mr Hong, an executive director at Blumont, first bought shares of Asiasons and LionGold in 2007.

Last year, he received some Blumont shares in his capacity as the firm's executive director, according to documents filed with Britain's High Court on Monday.

Mr Hong had also come to know Mr William Chan, chief executive and chairman of Stamford Management, last year.

Mr Chan offered to act as an investment consultant and assist Mr Hong in procuring loan facilities from banks for his investments.

He later told Mr Hong that Goldman Sachs would be willing to extend a loan facility to him against his shares in Asiasons and LionGold.

Mr Chan also introduced Ms Quah to the bank.

Mr Hong opened an account with Goldman Sachs in February this year, pledging his Asiasons shares in exchange for proceeds he could use to buy LionGold stock.

The size of his account with Goldman Sachs was estimated at about $12.4 million then.

In September, the bank agreed to fund the cost of the 1.75 million Blumont shares Mr Hong would take up as part of its rights issue.

However, things took a turn on Oct 2, a day after the Singapore Exchange (SGX) asked Blumont to explain how its market value had jumped more than 12 times to $6.3 billion within nine months.

Mr Hong's court papers show that a Goldman Sachs representative e-mailed him a demand notice at 11.48am on Oct 2, stating that he had to repay the $64 million loan in cash by 1.30pm that same day, less than two hours later.

Mr Hong then received an e-mail at 1.36pm stating that as he had defaulted on his payments, Goldman Sachs would "exercise its rights to appropriate all or any of his assets it held" to pay off his loan.

The next day, Mr Hong told Goldman Sachs that he had obtained an alternative loan facility of $40 million from BHP International Markets in exchange for 27.4 million Asiasons shares.

Despite this proposal to pay off his loan, Goldman continued to sell his stakes in the three counters.

These transactions carried on through Oct 23, even after the SGX had lifted its designation status on the three stocks.

Mr Hong contends that Goldman Sachs had "arbitrarily, capriciously, perversely and irrationally" sold the shares even when their values had fallen by 70 to 90 per cent.

The bank continued to sell the shares even after the SGX announced that it was "apparently engaged in an investigation into the trading and price fluctuations" of the three stocks, alleges Mr Hong.

He is suing for damages, interest and costs.

rjscully@sph.com.sg

[orangetea]

http://www.hubbis.com/profiles.php?pid=658

William Chan
Founder and Chairman
Stamford Privee
Type of Institution: Family Office
Country: Singapore

[Image: 1365122400.jpg]

William Chan is founder and chairman of Stamford Privee, a full service multi-family office and fund management company Stamford Management where it helps business- or wealth-owning families to execute investment management and asset allocation; business transition planning; financial, wealth and estate planning; wealth preservation and generational transfer; broader family business services; and client financial education programmes.

After spending nine years in one of the largest Swiss banks in the initial part of his career, William spent three years with one of the largest independent trust companies in Asia before setting up the family office.

William holds the Chartered Asset Manager, Chartered Risk Manager and Master Financial Professional designations from the American Academy of Financial Management. He is also a qualified Associate Financial Consultant (AFC), a Chartered Financial Analyst (CFA) candidate, an Accredited Investment Fiduciary (AIF), and a Chartered Family Office Specialist (CFOS).

William acts as an adviser to many important funds and family boards, and is also president of the Society of Family Offices Asia (SFO).

=========
AsianInvestor Q&A with Mr. William Chan

http://stamford-privee.com/blog/asianinv...liam-chan/

[orangetea]

http://www.dhklaw.com.sg/page7.php

[Image: logo.jpg]

LYNNE NG SU-LING, partner
LLB (Honours), University of Wolverhampton (1992)

[Image: lynne.jpg]

Tel: +65 6227 2281
Email: lynne@dhklaw.com.sg

Lynne was admitted as a Barrister in England & Wales in 1993, as an Advocate and Solicitor in Malaysia in 1994 and in Singapore in 2000. Lynne has experience practising in both Malaysia and Singapore and has close to 16 years of practice, mainly in the areas of corporate and commercial laws. Lynne advises and acts for clients on the following:

Banking/Loan transactions and documentation
Corporate and commercial matters
Corporate governance and compliance
Corporate finance
Cross-border investments
Employment Laws and contractual issues
Intellectual Property and Licensing issues
Mergers and Acquisitions
Takeovers

[orangetea]

[Image: ST_20131127_JRSJAMES_3938584e.jpg]

MR JAMES HONG GEE HO
Executive Director
Mr James Hong Gee Ho is the Executive Director of the Group. He has extensive experience in strategic investments and business development in South East Asia and China, and is currently also serving on the Boards of several private companies. Mr Hong holds a Bachelor of Arts in Political Science and Economics from the National University of Singapore.

Other captured profile
http://www.zoominfo.com/p/James-Ho/505165257

[opmi]

http://www.hubbis.com/profiles.php?pid=658

William Chan
Founder and Chairman
Stamford Privee
Type of Institution: Family Office
Country: Singapore

[Image: 1365122400.jpg]

William Chan is founder and chairman of Stamford Privee, a full service multi-family office and fund management company Stamford Management where it helps business- or wealth-owning families to execute investment management and asset allocation; business transition planning; financial, wealth and estate planning; wealth preservation and generational transfer; broader family business services; and client financial education programmes.

After spending nine years in one of the largest Swiss banks in the initial part of his career, William spent three years with one of the largest independent trust companies in Asia before setting up the family office.

William holds the Chartered Asset Manager, Chartered Risk Manager and Master Financial Professional designations from the American Academy of Financial Management. He is also a qualified Associate Financial Consultant (AFC), a Chartered Financial Analyst (CFA) candidate, an Accredited Investment Fiduciary (AIF), and a Chartered Family Office Specialist (CFOS).

William acts as an adviser to many important funds and family boards, and is also president of the Society of Family Offices Asia (SFO).

=========
AsianInvestor Q&A with Mr. William Chan

http://stamford-privee.com/blog/asianinv...liam-chan/

Chartered Financial Analyst (CFA) candidate

Mmmm....can put "CFA candidate" as credentials meh??? Seems like not in line with the guidelines for the use of CFA designation leh.

[lilvestor]

Third penny stock case against Goldman

Blumont director says bank breached duty by force-selling his shares

Published on Nov 27, 2013

By Rachel Scully

ANOTHER shareholder caught in the trading debacle over the Blumont Group, LionGold Corp and Asiasons Capital penny stocks is suing global bank Goldman Sachs.

Mr James Hong claims the bank, which had given him a credit facility of more than $64 million, breached its duty of care when it force-sold his shares in the three firms last month.

He is the third person to take legal action against the bank.

Ipco International chief executive Quah Su-Ling and LionGold independent director Ng Su Ling, who is also Ipco's company secretary, have both commenced legal proceedings.

Recent media reports said Ms Quah had loans in excess of $61 million with Goldman Sachs.

Singapore-based Mr Hong, an executive director at Blumont, first bought shares of Asiasons and LionGold in 2007.

Last year, he received some Blumont shares in his capacity as the firm's executive director, according to documents filed with Britain's High Court on Monday.

Mr Hong had also come to know Mr William Chan, chief executive and chairman of Stamford Management, last year.

Mr Chan offered to act as an investment consultant and assist Mr Hong in procuring loan facilities from banks for his investments.

He later told Mr Hong that Goldman Sachs would be willing to extend a loan facility to him against his shares in Asiasons and LionGold.

Mr Chan also introduced Ms Quah to the bank.

Mr Hong opened an account with Goldman Sachs in February this year, pledging his Asiasons shares in exchange for proceeds he could use to buy LionGold stock.

The size of his account with Goldman Sachs was estimated at about $12.4 million then.

In September, the bank agreed to fund the cost of the 1.75 million Blumont shares Mr Hong would take up as part of its rights issue.

However, things took a turn on Oct 2, a day after the Singapore Exchange (SGX) asked Blumont to explain how its market value had jumped more than 12 times to $6.3 billion within nine months.

Mr Hong's court papers show that a Goldman Sachs representative e-mailed him a demand notice at 11.48am on Oct 2, stating that he had to repay the $64 million loan in cash by 1.30pm that same day, less than two hours later.

Mr Hong then received an e-mail at 1.36pm stating that as he had defaulted on his payments, Goldman Sachs would "exercise its rights to appropriate all or any of his assets it held" to pay off his loan.

The next day, Mr Hong told Goldman Sachs that he had obtained an alternative loan facility of $40 million from BHP International Markets in exchange for 27.4 million Asiasons shares.

Despite this proposal to pay off his loan, Goldman continued to sell his stakes in the three counters.

These transactions carried on through Oct 23, even after the SGX had lifted its designation status on the three stocks.

Mr Hong contends that Goldman Sachs had "arbitrarily, capriciously, perversely and irrationally" sold the shares even when their values had fallen by 70 to 90 per cent.

The bank continued to sell the shares even after the SGX announced that it was "apparently engaged in an investigation into the trading and price fluctuations" of the three stocks, alleges Mr Hong.

He is suing for damages, interest and costs.

rjscully@sph.com.sg

Actually what is stopping him or the other 3 shareholders from buying back those shares from the open market now? The average forced sale price of those stocks should be far higher than current market price, technically they have profited from this perverse act by Goldman Sachs?

[CityFarmer]

Unfortunately, the SFA above states that this disclosure is not necessary at this moment?

The action of using shares as collateral against loans from financial institutions is deemed to result in a change of ownership. These institutions can now have the authority to do whatever they want in the event there are problems with loan repayment. Since at the end of the day, there is an indirect change of ownership, why arent such disclosures mandatory??

The quoted SFA clause granted the nondisclosure of financial institutions e.g. banks due to their nature of business

Listed companies are required to disclose share pledging arrangements, after the last SGX rule update on Sept 2011, i.e. the Rule 728, but only for controlling shareholders, not directors and SSHs.

[CityFarmer]

Actually what is stopping him or the other 3 shareholders from buying back those shares from the open market now? The average forced sale price of those stocks should be far higher than current market price, technically they have profited from this perverse act by Goldman Sachs?

One of the main reasons of stopping them is lack of fund, IMO

The previous shares owned were by margin loans. After the recalls, and I doubt they have sufficient fund now to re-purchase them back.

[NTL]

The forced sales were used to pay off the loans. Likely they already don't have much cash to buy the shares from open market, and also don't have the cash to buy all their rights issues.

To pay up the $60M within 2hr notice is really no small matter.

Hope to hear Goldman's side of the story.