An unlawful act of desperation has felled the top executive of a mainboard-listed company.
The Monetary Authority of Singapore (MAS) had taken civil penalty action against Mr Ang Choon Cheng, chief executive of Natural Cool Holdings, for false trading and share price manipulation.
He paid a civil penalty of $150,000 to MAS to avoid court action, the regulator said in a statement on Thursday.
Mr Ang, 48, had borrowed money from banks by pledging his shares in the company as collateral.
However, the onset of the global financial crisis in 2008 caused Natural Cool share prices to tank.
As a result, Mr Ang faced margin calls from the banks. His options were either to pare down his loans or top up his collateral to meet the borrowing requirements.
Instead, he bought Natural Cool shares in an artificial attempt to prop up the share price to avoid margin calls.
He did this on 35 days between Jan 9, 2008 and June 16, 2009.
As a result of the purchases, the thinly traded stock closed as high as 12 bids or 30 per cent above the preceding traded price.
Through his actions, Mr Ang intended to create, and created, a false or misleading appearance with respect to the price of Natural Cool shares, said the MAS.
He had carried out the purchases, as well as two sales transactions in Natural Cool shares, using the securities trading accounts of two other people with the same brokerage house.
Mr Ang resigned as a director and CEO of Natural Cool on Thursday, and has given a voluntary undertaking to the MAS not to be a company director for one year.
Separately, Natural Cool appointed executive director Tsng Joo Peng to succeed Mr Ang as CEO on Thursday.
To ensure a smooth handover and to enhance business continuity, the board has redesignated Mr Ang as group adviser.
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