Former No Signboard CEO fined $420k for false trading

Forty-seven-year-old Lim Yong Sim, the former executive chairman and CEO of No Signboard, was convicted and sentenced to a fine of $420,000 after pleading guilty to three charges of false trading.

He admitted that between June 19 and 29, 2018, he bought 4,331,200 No Signboard shares using the trading account of Gugong to falsely push up the price of the shares.

Lim, who was at the time the director and majority shareholder of Gugong, a majority shareholder of No Signboard, was under pressure from shareholders due to the company's declining share price.

As a result of the false trades, No Signboard share price rose by 27 per cent from $0.154 to $0.196, against the backdrop of a decline of 1.69 per cent in the Straits Times Index during the same period.

On Nov 29, 2018, No Signboard, in announcing its financial results, revealed that the company registered a loss — causing No Signboard share price to dip to to $0.137.

Lim began trading in No Signboard shares again, buying a total of 3,535,100 shares between Nov 30, 2018, and Jan 11, 2019, using Gugong's trading account.

The trades were aimed at cushioning the fall of No Signboard share price, supporting the share price at around $0.140 between Nov 30 and Dec 21, 2018, and at around $0.130 between Jan 3 and 11, 2019.

Lim on Jan 31, 2019, further used No Signboard's corporate share buyback account to conduct similar manipulative trades a day before the company released its financial results for 2019 Q1, which recorded a loss.

Lim bought a total of 1,068,700 No Signboard shares to cushion the selling pressure that would likely follow the imminent announcement.

The purchases were made above the price limit stipulated in No Signboard's share buyback mandate and raised the company's share price by 15.7 per cent over the previous day's close — far exceeding the movement in the STI, which rose only 0.50 per cent that day.

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This article was first published in The New Paper. Permission required for reproduction.