LionGold Corp Ltd - How much did Independent Director make from forced sale of shares by banks?

10/10/2013 – LionGold Corp Ltd's independent director Lynne Ng Su Ling has announced that 3.5 mln shares she owned in LionGold were sold in the market on Monday and Tuesday.

The latest disclosure comes after she revealed on October 7 the sale of more than 300,000 shares in LionGold, moments before the stock plummeted and was suspended Friday morning.

Investor Central has already "asked the questions that need to be asked" about Friday's sale in our earlier report.

The October 9 announcement discloses three transactions - two on Monday, October 7, and one on Tuesday, October 8.

Unlike the October 7 announcement, which didn't state the reason why the shares were sold, the October 9 announcement says "the sale of shares was due to forced selling by banks".

According to Ms Ng's disclosure, 2,445,161 shares were sold on October 7 for S$731,858.28 – that's at an average of 30 cents/share.

And 1,050,759 shares were sold on October 8 for S$256,069.97 – an average of 24.4 cents/share.

Now Ms Ng is left with just over 3.75 mln shares (a 0.4% stake) in LionGold.

Investor Central. Asian insights for global investors. We ask the tough questions of Asian companies which global investors need answers to.

1. How much did Ms Ng borrow from the banks?

It is obvious that Ms Ng pledged shares in LionGold as security while borrowing money from the banks.

Otherwise, why would the banks force sell her shares?

Already, half of her stake in LionGold has been sold in the open market, most of which was sold by the banks.

They raised S$987,928.25 – so, close to a million dollars.

Therefore that makes us curious about the amount of money she borrowed from these banks.

Also, will the banks sell the remaining shares too?

2. How much did Ms Ng profit from the sale of the shares?

While Ms Ng – an independent director of LionGold – can claim that the shares were force sold by the banks, she is the ultimate beneficiary of the sale.

The banks must have sold the shares to recover what they have already lent to Ms Ng.

In other words, Ms Ng need not repay about S$1 mln to the banks anymore.

According to page 23 of LionGold’s 2011 annual report, Ms Ng owns shares in LionGold since 2010.

In 2010, LionGold’s (then known as The Think Environmental Co Ltd) stock was worth about 40 cents a share.

Therefore, how much did she borrow in all?

3. What did she lend the money for?

Ms Ng is a partner in law firm Damodara Hazra LLP in Robinson Road.

Therefore, any reasonable observer would assume that she collects a relatively decent salary.

4. Which banks did she pledge the shares to?

Those banks must be having a really hard time to recover their money, given that the stock has lost about 90% of its worth is just three trading sessions.

We are still waiting for Ms Ng's response to our questions from the previous story.

Sofar, we have not had a reply (which is why you are seeing this message).

We hope she will be able to answer the above questions as well.

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