Saturday 20 July 2013

Bursa punishes remisier for manipulating Metech's shares

Bursa Malaysia published on its website:

"Bursa Malaysia Securities Berhad (Bursa Malaysia Securities) has publicly reprimanded, fined and ordered to strike off Ng Kok Kiong (NKK) for engaging in manipulative dealing activities in the securities of Metech Group Berhad (METECH).

NKK, who was at the material time of the breach, a Commissioned Dealer’s Representative of Public Investment Bank Berhad at its Kuala Lumpur branch office, had contravened and/or triggered the provisions of Rules 401.1(3), 404.3(1)(a) & (c) and 1302.1(1)(a) and (g) of the Pre-Revamped Rules of Bursa Securities (prior to the Revamped Rules of Bursa Securities which came into effect  on 2 May 2013).

.... NKK had engaged in manipulative trading activities over a period of several months (Relevant Period) in 15 clients’ accounts including his parents’ accounts."

Although I am positive regarding any enforcement action on Bursa Malaysia, the above announcement does pose some questions:
  • The manipulation took place over several months, but when? It must have been quite some time ago, since the company is delisted end of 2011 as a Practice Note 17 company. Surely investors in Metech, who might have been victim of the manipulation, deserve to know when NKK performed his trades.
  • Does Bursa Malaysia have adequate software to filter out this kind of manipulative trades? I would assume they have (it is not exactly rocket science), but why did it then take so long to trace the manipulation and to subsequently punish the remisier?
  • What was NKK's motive, was it personal gain (if so, how much did he gain) or was he acting for someone else, a syndicate or one of the major shareholders (if so, for who was he acting)?
  • A public reprimand is not much of an deterrent, a fine might be, but how much was the fine, why was this not disclosed?  If the remisier did profit personally, how did this profit compare to the fine?
  • "Strike off", is this for life?
Metech Group (code 9024), a Penang based company, used to be an associate of IJM, they held at one moment about 20% of the shares. Not much can be found on Bursa Malaysia's (otherwise excellent) announcement website regarding Metech:

Nor under it's old name, Sin Kean Boon

BM is not in the habit of removing older announcements, so I guess this is a bug in the software displaying the companies, not intentional.

However, the company's website is still live: and even its investor relations part, up to the moment it was delisted.

In the last 6 months over which it reported, it turned over only RM 7.9 million, for a loss of RM 2.9 million. Before its delisting it had disposed of its main subsidiary company, Metech Kenzai Sdn Bhd, hence the PN 17 status.

I can't find a graph of its share price, but I don't think minority shareholders have been very pleased with its performance.

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