Magnus Energy Chief Sued by Broker Over Stock Rout
A Deutsche Bank AG (DBK) brokerage sued the managing director of Magnus Energy Group Ltd. (MAGE) in Singapore to recover an unpaid trading debt.
Lim Kuan Yew owed DMG & Partners Securities Pte S$1.77 million ($1.4 million) for Blumont Group Ltd. and Asiasons Capital Ltd. shares bought in October, according to a lawsuit with the Singapore High Court. Singapore trading rules allow investors three days to pay for their stock purchases.
The Monetary Authority of Singapore and the police are investigating suspected stock-trading irregularities related to drops in Blumont, Asiasons and LionGold Corp. in early October 2013 that slashed $6.9 billion off the combined value of the shares. Magnus has been asked to assist in the probe, including providing electronic data and trading records of two executives.
Michelle Chia, a DMG spokeswoman, declined to comment. DMG is a venture betweenMalaysia’s RHB Capital Bhd (RHBC) and Deutsche Bank. Lim, who also traded in LionGold shares, according to court papers, didn’t answer four phone calls to his office.
Magnus Energy has said its business won’t be affected by the probe. Magnus Energy fell 7.7 percent to 1.2 Singapore cents as of 12:01 p.m. in trading in the city, extending this year’s slump to 64 percent.
DMG’s lawyers have tried unsuccessfully on three occasions to serve the lawsuit on Lim in Singapore, according to court papers filed last month. The brokerage said in court papers it’s attempting to serve Lim in Malaysia, where he’s believed to be residing.
Asiasons, Blumont and LionGold have said they don’t know what caused the sudden declines, which spurred brokers to clamp down on margin lending and dented trading sentiment.
Stock trading volume in the city tumbled about 32 percent from a year earlier to a daily average of S$1.05 billion this year through yesterday, data compiled by Bloomberg show.
The case is DMG and Partners Securities v Lim Kuan Yew, S694/2014. Singapore High Court.
To contact the reporters on this story: Andrea Tan in Singapore at atan17@bloomberg.net; Jonathan Burgos in Singapore at jburgos4@bloomberg.net
To contact the editors responsible for this story: Douglas Wong at dwong19@bloomberg.netDave McCombs, Terje Langeland
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