SINGAPORE: On Tuesday, November 7, the former chief executive officer of the now-defunct steel manufacturer and trader Oriental Group Limited ( OGL ) was given a nine-year prison term for directing an elaborate market-rigging scheme that ultimately led to the company’s demise.
A 47-year-old Malaysian named Lee Wan Sing had tricked traders, banks, and investing companies by using at least 50 trading accounts to carry out fraudulent trades, distorting the business and causing OGL’s share value to rise steadily by more than 300 percent.
He obtained credit facilities totaling S$ 1.4 million from banks by pledging his own OGL shares as security, despite the fact that their value had been artificially inflated, in order to finance the trades. He took S$ 500, 000 ( US$ 369,000 ) in cash from the company and stored it in a safe in his room.
Lee even fabricated records like sales orders and revenue invoices to conceal his songs from OGL’s auditors.
Despite knowing that the committee of OGL had filed a police record, he declared bankruptcy in March 2017 and left Singapore for Malaysia in May 2017.
Until his arrest in Malaysia in December 2021 and transfer to the Commercial Affairs Department, he remained outside of Singapore.
Lee admitted guilt to 17 costs, including fraud, document falsification, and other Securities and Futures Act offenses. 46 additional claims were taken into account.
CASE STUDY
The prosecutor was informed that OGL was a Singapore-incorporated firm engaged in the production and trade of metal bars.
From February 2010 until the settlement of OGL in May 2019, its stocks were listed on the Singapore Exchange’s Catalist table. & nbsp,
OGL had 342 owners as of August 18, 2016.
OGL reported net loss of 6.2 million renminbi( S$ 1.2 million ) and 87.6 million, both, for the fiscal decades of 2014 and 2015.
Lee was named OGL’s CEO in 2014. For the fiscal year 2015, he was paid S$ 240, 000 in income and S$ 20,000 in varying benefit.
Midway through 2014, he observed that OGL’s share rate had begun to fall. In order to counter its collapse, he wanted to increase the share value because doing so would undermine investor confidence and make it challenging for OGL to raise money through share securities.
Lee had conversations with his fellow assassins, including Allan Chan Geok Leng, a stockholder who owned at least 2 % of the company’s stock, Tan Seow Juay, the Group Financial Controller of OGL, and Lee Ong, investor Tan, all of whom held stocks in the firm.
With the help of Chong Yong Von, an OGL investment partnership manager who Lee recruited around October 2014, they agreed to participate in a plan to increase the price of the company’s shares.
Between April 2015 and January 2016, the plan was carried out, starting in October 2014.
During this time, Lee instructed his cronies to manage the exchanging of OGL shares in an effort to artificially raise the price.
Between December 2014 and December 2015, the plan was implemented using at least 50 records, 40 of which were opened per Lee’s guidelines.
Additionally, the partners engaged in cross-trades, which were typically priced higher than the previous done rate, raising the share value.
Deals were conducted in the program accounts on 185 days out of the 186 effective trading days during the program time. The accounts accounted for at least half of OGL’s everyday traded quantity on 157 of these days.
According to the prosecution, these accounts were used to trade around 339.5 million OGL shares overall, or 79.8 % of the total volume traded during the plan time.
OGL’s discuss price appeared to be rising as a result of the program. It increased from a period-low of Mho$ 0.030 on April 8, 2015, to an epoch-high Mho$ 134 in December, and then closed at S 0.127 on January 14, 2016.
OGL’s share rate dropped yet further between the buying reverses in January 2016 and March 2016, from S$ 0.127 to S$ 114, resulting in a market capitalization loss of S$ 6.86 million, according to the trial.
Lee and Chan worked together to matter false sales orders of scaffold materials in order to raise more money for the scheme.
OGL requested to stop trading its stocks on January 15, 2016, after a police report was filed in December 2016. & nbsp,
A few days after, OGL issued a statement asking for the trading block to be lifted regarding unauthorized transactions involving two subsidiaries of its organization that were related to the scheme.
On January 26, 2016, the share price dropped to a single-day small of S$ 0.090, but by January 29, 2016, it had recovered to S$ 0.121.
In March 2016, OGL requested to hold exchanging of its stock once more as well as a buying break. The share price exploitation by Lee and his associates was not mentioned in the related news.
On May 11, 2016, Lee resigned from his position. He left Singapore for Malaysia in May 2017 after being declared destitute on March 23, 2017. Until his arrest in Malaysia on December 1, 2021, he remained outside of Singapore.
About S$ 3.2 million was owed to several trading companies as of March 8, 2016, for the false professions in the accomplices’ accounts. The individual partners have fully repaid these, but S$ 113, 000 is still owing in Lee’s personal trading accounts.
According to the trial, Lee’s offenses affected OGL, its buyers, banks, buying firms, the broader stocks market, and the investing public. The prosecutors sought 10 and a half to 12 years in prison for Lee.
According to Deputy Public Prosecutor Ryan Lim and Gan Ee Kiat, the accused’s” direct monetary losses to OGL and the bankers were very considerable, at S$ 357, 500, and S 381, 135 both.”
They claimed that they unquestionably contributed to OGL’s eventual death.