Jade’s ex-president jailed and fined over sham takeover bid to push up its share price

http://www.straitstimes.com/business/companies-markets/jades-ex-president-jailed-and-fined-over-sham-takeover-bid

Related: (1) The trouble with non-binding takeover offers that create a false and manipulated ceiling for the target company’s shares which could be pledged or faced margin calls; There are numerous examples of where such buyouts have ended in tatters and some investors getting burnt; (2) China Cord Blood Corp (NYSE: CO) and Golden Meditech (801 HK): Accounting Facts and Footnotes; (3) Taiwan’s MOF asks banks for details of Chinese loans to two troubled Chinese companies – Frankfurt-listed Chinese shoe company Ultrasonic AG whose executives disappeared with the loan and Golden Meditech (801 HK); TSU raises question of insider trading in Golden Meditech TDRs; FSC boss quizzed on Lien’s Golden Meditech TDRs; (4) 脐带血功效被夸大 中源协和 (Zhongyuan Union Cell & Gene: 600645 CH) 核心业务受困; 胎盘脐带血自费存储乱象; 脐带血:是生命种子,还是炒作噱头?“变了味”的脐带血; 脐带血保存,一场骗局? 血疑——上海市脐血库事件调查; Inside the Private Umbilical Cord Blood Banking Business: Wall Street Journal Analysis Found Dirty Storage, Leaky Blood Samples and Firms Going Under

Jade’s ex-president jailed and fined over sham takeover bid

Soh made a takeover offer for Jade Technologies in a bid to push up its share price.ST FILE PHOTO

5 HOURS AGO

Chong Koh Ping

The former president of Jade Technologies was sentenced yesterday to eight years and nine months’ jail and fined $50,000 for offences connected to his botched takeover bid for the company in 2008. Anthony Soh Guan Cheow, a doctor-turned-businessman, was convicted of 39 charges, including market rigging and insider trading as well as two charges of giving false reports to the Singapore Exchange and Securities Industry Council. He was given two years and six months’ jail for market rigging and jail terms ranging from six months to two years and six months for seven counts of insider trading. The sentences are the highest imposed for such offences in Singapore. This is also the first time a person has been convicted and sentenced under Section 140 of the Securities and Futures Act for making a takeover bid when he could not fulfil the obligations in the transaction.Soh, 60, announced a takeover offer for Jade, now known as Cedar Strategic Holdings, via Asia Pacific Links (APL) in February 2008. He was also the director and sole shareholder of APL.

He had priced his offer at 22.5 cents a share with the aim of raising the stock price so as to dump Jade shares at an inflated price.

He was facing financial pressure owing to Jade’s falling share price and a series of margin calls from lenders for Jade shares that he had earlier pledged for loans.

Soh knew he needed at least $116 million for the bid, but his net worth was only between $3 million and $5 million at that time. He withdrew his bid just a week before the offer deadline in April 2008. Other than maintaining Jade’s share price at an artificial level from February to April 2008, the takeover offer enabled the sale of more than $10 million worth of Jade shares to the public at an inflated price. Soh used the proceeds of these sales to fulfil his other financial obligations.

In his judgment, District Judge Soh Tze Bian said Soh was a “scheming, lying and sophisticated crook”. He added that Soh “clearly had no genuine intention” to carry out the takeover offer, which “was all along a sham offer born out of desperation”. The judge found Soh guilty of all 11 charges proceeded with at trial. He was convicted on July 15.

Soh also faced 28 charges under Sections 165 and 166 of the Companies Act for not disclosing changes in his shareholdings of Jade shares to Jade and to SGX while being a director of Jade. He pleaded guilty.

The prosecution has applied for Soh to be disqualified from acting as a director or being involved in managing a company after his release from prison. The prosecution has also applied for $2.6 million in a UBS bank account, proceeds of his insider trading offences, to be forfeited to the State. There will be a hearing on these two matters next month or in October. Soh is out on bail of $800,000 pending an appeal.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s