.jpg)
Public Reprimand: Breaches of Listing Rules
1. The SGX-ST Listings Disciplinary Committee (“LDC”) reprimands the following persons associated with Magnus Energy Group Ltd (the “Company”):
(a) Luke Ho Khee Yong (“Ho”), former CEO; and
(b) Kushairi Bin Zaidel, former Independent Director and Chairman;
(c) John Ong Chin Chuan, former Independent Director;
(d) Ong Sing Huat, former Non-Independent Non-Executive Director; and
(e) Seet Chor Hoon, former Independent Director (collectively, the ‘former Board’),
for breaching the Catalist Rules in connection with two transactions:
(i) the disposal of 9,000,000 shares in GCM Resources plc (“GCM”) through the Company’s wholly-owned subsidiary, MEG Global Ventures Pte Ltd (“MGV”) (“Transaction 1”); and
(ii) the acquisition of a convertible loan from Revenue Anchor Sdn Bhd (“Revenue Anchor”) pursuant to a deed of assignment between Revenue Anchor and MGV (“Transaction 2”).
2. In addition, the LDC has required:
(a) Ho to provide a signed written undertaking to the Exchange not to seek any directorship on the board of directors, or role as a key executive officer (as defined in the SGX listing rules) of issuers whose securities are listed on the SGX Mainboard or Catalist for a period of two years from 13 March 2023; and
(b) each member of the former Board to provide a signed written undertaking to the Exchange not to seek any directorship on the board of directors, or role as a key executive officer (as defined in the SGX listing rules) of issuers whose securities are listed on the SGX Mainboard or Catalist for a period of one year from 13 March 2023.
3. With respect to Transaction 1, the Company had made two SGXNet announcements on the transaction, on 8 March 2017 and 21 June 2017. Subsequently, queries were raised by the Exchange and the Company provided its responses on 12 October 2018.
4. In a resolution agreement submitted to the LDC, Ho and the former Board admitted to causing the Company to be in breach of the following rules in relation to Transaction 1:
(a) Catalist Rule 703(4)(a), by failing to ensure that the Company’s SGXNet announcements dated 8 March 2017, 21 June 2017 and 12 October 2018 were factual and clear as to whether the 9,000,000 GCM shares were completely sold by MGV given that:
(i) the announcements dated 8 March 2017 and 21 June 2017 were not clear from the outset that the Company had disposed of 9,000,000 GCM shares for the consideration of approximately S$3,100,000 as the Company failed to disclose the relevant key details, including the fact that the disposal was related to the GCM shares, the identity of the counterparty, the number of GCM shares sold, as well as the aggregate value of the disposal consideration; and
(ii) the announcement dated 12 October 2018 disclosed contradictory information as to whether the GCM shares had been sold, or if the sale of GCM shares was still ongoing with the GCM shares held on trust by a trading firm;
(b) Catalist Rule 1010, by failing to ensure that the Company disclosed the requisite information with respect to the disposal of 9,000,000 GCM shares; and
(c) Catalist Rule 719(1), by failing to ensure that the Company had in place a robust and effective system of internal controls with respect to matters concerning Transaction 1.
5. With respect to Transaction 2, MGV had entered into a deed of assignment with Revenue Anchor (the “Deed”) whereby Revenue Anchor, as the lender to GCM for an outstanding convertible loan of £510,000, was to assign to MGV the benefits of the convertible loan, including the right to convert the outstanding balance of the convertible loan into shares in GCM. The funds raised from the convertible loan was for GCM to fund its Phulbari Coalmine project in Bangladesh, which was a major asset of GCM.
6. In the resolution agreement submitted to the LDC, Ho and the former Board admitted to causing the Company to be in breach of the following rules in relation to Transaction 2:
(a) Catalist Rule 703(1)(a), by failing to ensure that the Company disclosed that a condition precedent for the Deed, viz. obtaining consent from GCM for the assignment of debt, had not been fulfilled, which was information known by Ho and the former Board, and necessary to be disclosed to avoid the establishment of a false market in the Company’s securities;
(b) Catalist Rule 703(1)(a), by failing to ensure that the Company disclosed that GCM did not have the requisite regulatory permits to commence coal production at the Phulbari Coalmine, which was information known by Ho and the former Board, and necessary to be disclosed to avoid the establishment of a false market in the Company’s securities;
(c) Catalist Rule 1010, by failing to ensure the Company disclosed the requisite information with respect to the Deed; and
(d) Catalist Rule 719(1) by failing to ensure the Company put in place a robust and effective system of internal controls to ensure that all requisite and material information relating to Transaction 2 was disclosed in accordance with the Catalist Rules.
7. The LDC’s Grounds of Decision is attached.
