Ex-CEO of No Signboard Holdings fined S$420,000 for false trading of own company's shares

The former executive chairman and chief executive officer (CEO) of restaurant operator No Signboard Holdings was fined S$420,000 on Nov. 1 for price rigging offences.

Lim Yong Sim, 47, pleaded guilty to three charges of false trading, the Singapore Police Force (SPF) said in a news release on Friday.

The false trading of shares was to cushion its price declines.

What accused did

June 2018: Bought 4.3 million shares

In June 2018, Lim purchased 4,331,200 of No Signboard shares using the trading account of Gugong Pte Ltd.

This was to falsely push up No Signboard’s share price.

Lim was then the director and majority shareholder of Gugong, which was in turn a majority shareholder of No Signboard.

Lim was under pressure from shareholders due to No Signboard's declining share price.

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

November 2018 to January 2019: Bought 3.5 million shares

In late November 2018, No Signboard announced its financial year 2018 financial results, which revealed that the company registered a loss.

Following the announcement, No Signboard share price fell to S$0.137.

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

These trades were aimed at cushioning the fall of the share price after the company’s financial year 2018 results.

Lim’s trades supported the share price at around S$0.140 between Nov. 30 and Dec. 21, 2018, and at around S$0.130 between Jan. 3 and 11, 2019.

January 2019: Bought 1 million shares

On Jan. 31, 2019, Lim further used the corporate share buyback account of No Signboard to conduct similar manipulative trades.

These trades were conducted just one day before No Signboard released its financial results for first quarter of financial year 2019, which recorded a loss.

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

Lim’s purchases were made above the price limit stipulated in No Signboard's share buyback mandate and raised the share price by 15.7 per cent over the previous day’s close.

This far exceeded the movement in the STI, which rose only 0.50 per cent that day.

April 2019: Arrested

Lim was arrested in April 2019.

He was suspected to have breached sections under the Securities and Futures Act.

July 2023: Charged

He was charged in July 2023 for price rigging offences.

No Signboard Holdings announced that Lim was suspended from all his executive duties after he was charged.

This conviction was the result of a joint investigation conducted by the Commercial Affairs Department of the SPF and the Monetary Authority of Singapore, following a referral from the Singapore Exchange Securities Trading Limited, the police release added.

Top photos via apea.asia & No Signboard Seafood