Former CEO Fined for Price Rigging

In a stunning turn of events, Lim Yong Sim, the former executive chairman and CEO of popular Singaporean restaurant operator No Signboard Holdings, has been slapped with a hefty fine of S$420,000 (approximately US$317,000) for engaging in price rigging activities. The Singapore Police Force (SPF) confirmed on November 1 that Lim had pleaded guilty to three serious charges of false trading.

Price Manipulation Scheme

The scandal dates back to June 2018 when Lim, under significant pressure due to No Signboard's fluctuating share prices, purchased a staggering 4,331,200 shares through the trading account of Gugong Pte Ltd. This dubious move was intended to artificially inflate No Signboard’s stock price, causing it to soar by an eye-popping 27%, jumping from S$0.154 to S$0.196, even as the broader market—the Straits Times Index—recorded a decline of 1.69%.

Sharp Decline in Stock Prices

However, this upward surge was short-lived. Following the alarming announcement of its financial results for the 2018 fiscal year, which revealed a loss for the company, No Signboard's shares plummeted back down to S$0.137 by the end of November. Shockingly, just a day after this disappointing news, Lim resumed trading in No Signboard shares, buying another 3,535,100 shares through Gugong's account between November 30, 2018, and January 11, 2019. These trades were again aimed at propping up the company’s share price, which hovered around S$0.140.

Further Manipulative Trading

The deceptive practices didn’t stop there. Lim even employed No Signboard’s corporate share buyback account for similar manipulative trades at the end of January 2019. On January 30, 2019, he purchased 1,068,700 shares just a day before the release of the company’s financial results for the first quarter of the 2019 financial year, where it recorded yet another loss. These trades, executed at prices above the buyback mandate limits, succeeded in pushing the stock price up by 15.7%, far exceeding the modest 0.5% rise in the STI on the same day.

Legal Consequences

Caught in a web of deceit, Lim was arrested in April 2019 under suspicions of violating the Securities and Futures Act. His legal troubles escalated, leading to charges being filed against him in July 2020. In light of the investigation, No Signboard Holdings swiftly suspended Lim from all executive roles.

Impact on the Investment Community

This financial scandal has sent shockwaves through the Singaporean investment community, raising serious questions about corporate governance in public companies. Investors are now left wondering what further ripple effects this incident may have on No Signboard Holdings and the broader market as regulatory scrutiny intensifies.

Stay Tuned!

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