THE former chief executive of mainboard-listed KTL Global, Tan Kheng Yeow, began serving his eight-month jail sentence after the High Court dismissed his appeal in July, the Monetary Authority of Singapore (MAS) and Singapore Police Force (SPF) said in a joint statement on Wednesday (Aug 28).
Tan was sentenced to jail by the State Courts on Jan 23 for conspiring with another individual, Tang Boon Hai, to create a false appearance of active trading in KTL shares.
Their actions came amid concerns that KTL was unable to meet the new minimum trading price requirement announced by the Singapore Exchange in 2014.
Under the requirement, a mainboard-listed company’s volume-weighted average price (VWAP) over a six-month period cannot fall below S$0.20. Issuers that fail to comply may be delisted.
The six-month VWAP of KTL’s shares as at Aug 1, 2014, was below the minimum price required.
Hence, between Oct 16, 2014, and Sep 8, 2015, Tan conspired with Tang to create a facade that people were actively buying KTL shares, in order to increase the company’s share price.
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Tan also held significant quantities of KTL shares and knew that his net worth would increase along with the share price, said MAS and SPF.
They highlighted that Tan also arranged for the funds to be transferred to Tang to finance trades in KTL shares placed by the latter in 14 trading accounts.
Tang is said to have used the accounts to buy 122.8 million shares and sell 120.7 million shares from Nov 4, 2014, to Sep 8, 2015. This resulted in the average daily traded volume for the stock to surge to about one million shares during that period, up from about 96,859 shares over the previous six months.
To do this, Tang allegedly instructed a former trading representative from OCBC, Tan Chun Yong, to place orders and trades in the stock using six accounts, which belonged to other individuals and were serviced by OCBC Securities.
Tang was convicted on Apr 18, 2023, and was sentenced to 30 months’ imprisonment. Meanwhile, Tan Chun Yong was charged on Oct 29, 2020, and court proceedings are still ongoing.
KTL’s Tan has pleaded guilty to one charge under section 197(1)(a) of the Securities and Futures Act (SFA) and section 109 of the Penal Code. He still faces two other charges of cheating and dishonestly inducing delivery of property.
Shares of KTL Global last closed flat at S$0.116 on Aug 6, 2021, before the counter went into a trading halt. The company subsequently applied for the halt to be converted into a voluntary suspension.
The voluntary suspension came after the branding, operations and procurement company undertook an independent review to look into transactions of its subsidiary Bluegas with four branding, operation and procurement customers in China.
In a bourse filing on May 15 this year, KTL announced that the Singapore Exchange Securities Trading (SGX-ST) will proceed to delist the company. This came as KTL failed to meet the requirement of the listing rule and exit the watch list even after being given an extension by the SGX till Jun 30.
The company was placed on the watch list on Dec 4, 2019. Companies are placed on the watch list if they record losses for the three latest consecutive financial years, and have an average daily market cap of under S$40 million over the last six months.
As the company will be delisted, KTL or its controlling shareholders must provide a reasonable exit offer to shareholders.
KTL noted that it will inform SGX-ST about the exit offer proposal as soon as practicable and no later than one month from May 14, which was the date it received the delisting notification.
