Fund manager found guilty of market-rigging wants his license back

A leading investment adviser who lost a market-rigging lawsuit in 2010 hopes to practise as a fund manager here and rebuild his Singapore business again.

A prohibition order against Dr Tan Chong Koay, 65, that barred him from carrying out fund management activity in Singapore and from involvement in running a fund management business here expired on Nov 29 last year.

He has applied for a fund management licence and is awaiting approval.

Dr Tan was one of Singapore's pioneering boutique fund managers. He is the founder of Pheim Asset Management (Asia) in Singapore, and founder and chief executive of Pheim Asset Management (Malaysia).

Funds under his management have consistently won accolades for outperforming the market even during downturns.

With a cumulative return of 497.3 per cent (in US dollar term) over two decades - which averages about 25 per cent per year - his Pheim ASEAN Fund took top position for all the one-to-20-year periods among all equity ASEAN funds in the Lipper Global classification on the fund's 20th anniversary on Feb 3 .

In his new book Rising Above Financial Storms, Dr Tan recalls the "nightmare" when the Monetary Authority of Singapore (MAS) initiated a civil suit against him and his Malaysian unit for rigging the shares of Singapore-listed wastewater firm United Envirotech from Dec 29 to 31 in 2004.

This contravention of the Securities and Futures Act (SFA) eventually resulted in a $250,000 fine each for him and the Malaysian unit.

The SFA prohibits dealings in securities that create an illusion of genuine supply or demand in the market.

Dr Tan appealed against the court ruling and his three-year prohibition period for carrying out fund management activity and four-year prohibition period from involvement in management of a fund management business here were both reduced to two years, starting in November 2012.

In an interview with The Straits Times, he said: "I hope to be given a chance to rebuild my business again."

Meanwhile, he is excited about the launch of his book, in which he shares his investment philosophy and nuggets of wisdom on how to be a successful investor. It also details the thinking behind some of the stocks he picked.

Dr Tan believes that market timing is "the key to superior investment performance". He also says that a fund should never be fully invested at all times as Asian markets tend to be volatile, which creates opportunities.

Pheim Asset Management (Malaysia) manages about RM1 billion (S$329 million) in funds, while the Singapore unit has a fund size of between $80 million and $90 million.

Rising Above Financial Storms was recently launched in Malaysia and will be available in major bookstores here this week. All profits made from the book will go to charity.

This article was first published on October 15, 2015.
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