Singapore Markets closed

LionGold Corp Ltd - What prompted independent director to sell, just before the dramatic sell-off?

Ashish Saxena
Investor Central

8/10/2013 – LionGold Independent Director Lynne Ng Su Ling has revealed through a disclosure to the SGX that she sold more than 300,000 shares in LionGold, moments before the stock was suspended after a dramatic sell-off last Friday morning.

Ms Ng announced she sold 335,333 LionGold shares for S$393,982.74 on Friday.

That works out to an average sale price of S$1.18 per share.

They closed Monday at S$0.25.

Had Ms Ng not sold those shares on Friday morning, they would have fetched her just S$83,833 by Monday's close.

Ms Ng's quick thinking saved her about S$310,000.

She continues to hold 7.26 mln shares in LionGold, or about 0.77% of the company.

The sale of LionGold shares follows a transaction two days earlier, in which she sold 1 million Blumont shares worth S$2.38 mln.

At Monday's closing price of S$0.13, those shares would now only be worth S$130,000.

Ms Ng continues to own 51.8 mln Blumont shares or a 3.01% stake, 18.7 mln of which she owns directly.

LionGold Corp Ltd and Blumont Group Ltd were two of the three companies whose stocks were suspended from trading by SGX, after a precipitous fall on Friday morning.

The other company was Asiasons Capital Ltd.

The exchange – which also has certain regulatory functions – said the suspension of trading was 'to safeguard the interests of the market as there could be circumstances that would result in the market not being fully informed'.

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

1. What prompted Ms Ng to sell, just before the dramatic sell-off?

Before the freaky Friday, Ms Ng owned a 0.81% stake in LionGold.

She is deemed to have an interest in the shares through Goldman Sachs (Singapore) Pte Ltd, Maybank Nominees (Singapore) Private Limited and Singapura Finance Ltd.

Any reasonable observer would envy Ms Ng for her impeccable timing.

The average selling price of S$1.18/share suggests that the shares were sold within the first half an hour of trade on Friday – as the stock price dipped far below that level after 9:30am:

Subsequently, SGX suspended trading in the counter at about 10am.

While everybody was awestruck by the sudden collapse of LionGold's stock price on Friday morning, any reasonable observer would ask what prompted Ms Ng to sell those shares in the nick of time?

We have no evidence to suggest Ms Ng had – or acted upon – insider information, and we are not making any allegations.

We emailed Ms Ng to ask for clarification, but at time of publication are yet to receive a reply.

Ms Ng has an association with other companies linked to LionGold, as the following Handshakes' map shows:

Ms Ng is also a director of Blumont Group Ltd – another company which saw a LionGold-like fall in the stock price on Friday, and which was subsequently suspended by SGX.

Blumont Group's stock price has fallen 95% from Thursday's close whereas LionGold's stock is down about 85%.

Ms Ng is also a shareholder of Innopac Holdings Ltd, which has dropped more than 70% since Thursday's close.

And she serves as the company secretary of IPCO, which owns 8.2% in Innopac (source).

IPCO also owns 9.71% of Blumont (source).

(Total:3 questions)

While our purpose is to ask the questions which the man on the street would ask, and to help the everyday investor make informed investments, please note that:

Our articles and presentations ('our contents') are not investment advice nor should they be construed as investment advice or any recommendation of any kind; nor meant to cast allegations or insinuations of any kind against any individuals or entities. Before acting on the material in our contents, you should either seek independent advice tailored to your particular circumstances and intentions or rely on your own judgement.

Our articles and presentations express our observations, opinions and theoretical analysis based on the facts that we have gathered or have been provided to us. While we endeavour to ensure that our contents are accurate and are presented in good faith, we cannot and do not warrant the accuracy, adequacy or completeness of the material or that the material is suitable for its intended use; and we disclaim any such warranties express or implied that may be presumed by any party; neither do we take responsibility for the views of companies or other stakeholders or observers or sources quoted or hyperlinked in our contents. While every precaution has been taken in the preparation of our contents, we (and our principals) shall not be liable for any losses or damage or inconveniences due allegedly to errors or omissions in any facts or due allegedly to reliance on our contents in any way whatsoever; nor for any damage to any computer hardware, date information or materials allegedly caused by our contents.

All expressions of opinion and observations in our contents are subject to change without notice and we do not undertake a duty to update and supplement our contents or the information contained herein in the event we obtain any further or more complete information.

©2013 Investor Central® - a service of Hong Bao Media