Insiders' Blumont stakes pared; traders query delay in disclosing sales

PHOTO: Insiders' Blumont stakes pared; traders query delay in disclosing sales

Beleaguered Blumont Group came under further heavy selling pressure on Wednesday.

The latest sell-down followed disclosures late on Monday night that its chairman Neo Kim Hock and other insiders had pared their respective company stakes as a result of forced selling by banks.

Blumont's share price tumbled from the opening bell, falling to as low as 11.5 cents by mid-afternoon.

It then pared its losses slightly, closing down 16.33 per cent at 12.3 cents on a volume of 33.83 million shares.

The series of forced sales left traders wondering why the insiders were allowing the banks to forced sell their shares, rather than try to repay the loans they might have obtained from pledging Blumont shares as collateral.

In just over a week, Blumont's price has plunged by 95 per cent from $2.02.

The initial crash in its stock price led to a trading suspension and then a restriction of its trades to cash-only transactions and a ban on short-selling when trading resumed on Oct 7.

Some traders are also upset at the delay by Mr Neo in disclosing the latest spate of sales of his shares by the banks. They questioned Blumont's tardiness in reporting Mr Neo's sales.

An earlier news report had already noted that Mr Neo was late in reporting that banks had forced sold Blumont rights - instruments which allow investors to buy Blumont shares - just days before the counter experienced a free-fall in its share price.

In the latest announcement on Mr Neo's sales, Blumont told the Singapore Exchange in a 22-page statement late on Monday night that Mr Neo had sold 1.41 million shares one week earlier for $204,747.

"Mr Neo only had knowledge of the bank loan recall/forced sale of the securities held on Oct 14," the firm said.

The company also gave details of later sales of Mr Neo's shares, showing that another 34.26 million shares were forced sold by the banks between Tuesday last week and Monday, netting him about $3.15 million.

Blumont also gave details of sales of shares by another insider, executive director James Hong Gee Ho, on Monday.

It said that last Friday, Mr Hong had unloaded 233,000 shares which netted $45,202 due to forced selling by banks.

This was on top of another 6.645 million shares forced sold by banks between Tuesday and Thursday last week, netting him about $1.15 million.

Similarly, Blumont had cited forced selling by banks as the reason for a spate of sales of its shares by non-executive director Ng Su Ling.

Ms Ng had sold one million Blumont shares for $2.38 million on Oct 2. She then sold another 17 million shares, netting $1.88 million between Monday and Wednesday last week.

Blumont also disclosed on Monday that a substantial shareholder, Mr Ooi Cheu Kok, had offloaded 32.16 million shares the previous Monday, netting him $6.18 million.

Explaining Mr Ooi's delay in reporting the sale, Blumont said: "Mr Ooi only had knowledge of the bank loan recall/forced sale of the securities held on Oct 13."

Separately, Blumont on Wednesday said its one-for-two rights issue at five cents apiece was over-subscribed by about 37 per cent, raising gross proceeds of some $43.05 million.

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