On 1 November 2024, 47-year-old Lim Yong Sim (“Lim”), former Executive Chairman and Chief Executive Officer of No Signboard Holdings Limited (“NSB”), a company listed on the Catalist Board of the Singapore Exchange, was convicted and sentenced to a fine of $420,000 after pleading guilty to three charges of false trading under Section 197(1)(b) of the Securities and Futures Act (“SFA”).
Lim admitted that between 19 and 29 June 2018, he purchased 4,331,200 NSB shares using the trading account of Gugong Pte Ltd (“Gugong”), to falsely push up the price of NSB shares. Lim was then the director and majority shareholder of Gugong, which was in turn a majority shareholder of NSB.
At the material time, Lim was under pressure from shareholders due to NSB’s declining share price.
As a result of Lim’s false trades, NSB share price rose by 27% from $0.154 to $0.196, against the backdrop of a decline of 1.69% in the Straits Times Index (“STI”) during the same period.
Sometime later, on 29 November 2018, NSB announced its financial year (“FY”) 2018 financial results, which revealed that the company registered a loss. Following the announcement, NSB share price fell to $0.137.
Lim began trading in NSB shares again the next day and purchased a total of 3,535,100 NSB shares between 30 November 2018 and 11 January 2019 using Gugong’s trading account. These trades were aimed at cushioning the fall of NSB share price after the company’s FY 2018 financial results. Lim’s trades supported NSB share price at around $0.140 between 30 November and 21 December 2018, and at around $0.130 between 3 and 11 January 2019.
On 31 January 2019, Lim further used the corporate share buyback account of NSB to conduct similar manipulative trades. These trades were conducted just one day before NSB released its financial results for first quarter of FY 2019, which recorded a loss. Lim purchased a total of 1,068,700 NSB shares to cushion the selling pressure that would likely follow from the imminent announcement. Lim’s purchases were made above the price limit stipulated in NSB's share buyback mandate and raised NSB share price by 15.7% over the previous day’s close. This far exceeded the movement in the STI, which rose only 0.50% that day.
This conviction was the result of a joint investigation conducted by the Commercial Affairs Department of the Singapore Police Force and the Monetary Authority of Singapore, following a referral from the Singapore Exchange Securities Trading Limited.
SINGAPORE POLICE FORCE
01 November 2024 @ 6:10 PM