SGX's investigation was complicated by the need to examine the trades of more than 50 parties, the significance of the commercial and personal relationships among them, and the cash flows and trading patterns of the individuals and institutions that traded in Links Island shares. In the course of its investigations, SGX officials held discussions with MAS officials and also rendered co-operation to the Commercial Affairs Department (CAD) in its separate investigations into possible criminal offences in relation to the trading of shares in Links Island. SGX has been informed that the CAD investigations are still ongoing.
Links Island listed on 28 February 2000 with 190 million shares on issue, offered at 28 cents. At its Initial Public Offer (IPO), Links Island had 6,588 public shareholders and a freefloat of more than 23%. Following the IPO, the counter traded within a range of 20.5-35 cents, closing at 33 cents on 19 June 2000, a 18% increase over the IPO price in four months. On 20 June 2000, Links Island shares gained 6 cents to close at 39 cents and continued to rise to a peak of $1.43 on 3 August 2000, closing at $1.14 on that day. The counter closed at $1.29 on 14 August 2000, a surge of 231% from its closing price of 39 cents on 20 June 2000. Before the suspension of trading on 16 August 2000, the counter traded at $1.10 and the freefloat of Links Island shares had declined to less than 8% of the total number of shares outstanding.
The SGX investigation also revealed large off-market married deals and co-ordinated buying or selling of Links Island shares at the same time. Such co-ordinated purchases accounted for a significant portion of the market volume on certain days.
Settlement of market trades in Links Island shares done on 14-16 August 2000 has been suspended since 16 August 2000, pending the outcome of the SGX investigation. In view of the Board's conclusion regarding a corner situation in Links Island shares in the period leading up to the suspension of trading in the counter, the SGX-ST Board has resolved that all outstanding market trades in Links Island be cash settled in accordance with SGX-ST Rule 6.8.1 (5).
The SGX-ST Board has constituted a Settlement Committee in accordance with Rule 6.8.2 to determine a fair settlement price for all outstanding market trades. The committee's decision will be announced in due course.
The Settlement Committee will comprise the following persons:
- Mr J.Y. Pillay, Chairman of SGX and a Board member of SGX-ST.
- Mr George Teo, Board member of SGX and SGX-ST.
- Mr Leong Yit Siong of PricewaterhouseCoopers.
- Mr Robert Wong of Robert Wong and Co.
- Ms Fang Ai Lian of Ernst & Young.
