Where are the Chinese when you need them?
High-end real estate. Ritzy automobiles. Luxury goods. Swanky country clubs. These are some of the things the now-infamous foreign nationals behind Singapore’s largest money laundering scandal have been splurging their money on over the last few years.
From their reportedly flamboyant spending sprees, one could argue that these individuals — all originally Chinese nationals but now holding other citizenships — could have had a hand in contributing to Singapore’s growing inflation.
There’s no official data to back this argument, at least not yet. But as far as the protagonists are concerned, parking their alleged ill-gotten fortunes in Singapore made sense, given the citystate’s status as a safe haven and its seamless connectivity with the rest of the world. Plonking cash into properties, gas guzzlers and multiple accounts with various banks, among other things, was a way to root themselves here.
But one area they were sorely absent from — and where they could have made a meaningful impact had they opted to mobilise their wealth there — was Singapore’s moribund stock market. I’m writing with tongue in cheek. Imagine what the over $2.4 billion in assets seized from the group by the police so far could have done for Singapore stocks and investor sentiment had this sum of money made its way into the local bourse. That’s more than double the average daily securities turnover of $1 billion on the Singapore Exchange (SGX).
It’s not certain yet that none of their money has gone into Singapore stocks. What’s known so far is that one of them emerged as a controlling shareholder of Catalist-quoted No Signboard Holdings after buying a block of shares in the restaurant chain more than two years ago.
Su Haijin spent nearly $6.5 million on some 92.5 million shares in a single transaction with No Signboard’s largest shareholder, GuGong, according to regulatory filings dating back to May 2021. That works out to 7 cents a share, making Su the second-largest shareholder with a 20% stake and a non-executive board director. GuGong remains the largest shareholder, with a stake of 55%.
The $6.5 million sales proceeds went to GuGong, owned by No Signboard’s then-chairman and CEO, Lim Yong Sim and not to the listed company. In any case, Su, a controlling shareholder, didn’t seem to have benefited the company or minority shareholders.
Following media coverage of his arrest
for suspected money laundering in August, No Signboard said Su was never involved in its day-to-day operations and was absent from all board meetings. The stock has also never exceeded 7 cents since Su became a shareholder. Amid a long-running list of woes and disputes, the company’s shares have been suspended since January 2022 and last traded at 3.1 cents — less than half of what Su paid.
Could the money from these foreign nationals have resurrected Singapore’s lethargic stock market had it gone into companies here? The question is hypothetical, and we will never know the answer. If anything, many investors burnt by the S-Chip saga in the mid-2000s still have misgivings about Chinese-controlled companies.
SGX has, in recent years, introduced several initiatives to beef up interest in the stock market, such as launching spacs and rolling out Singapore Depository Receipts for investors to buy and sell shares of companies listed on other exchanges during local trading hours.
The response, in my view, is lukewarm at best. The number of IPOs in Singapore so far this year can be counted on one hand, although this should be seen in the context of a worldwide slump in new listings.
One can blame high inflation, soaring interest rates and global economic jitters for the tepid state of the local stock market. But, these challenges are not unique to Singapore. The US, the undisputed leader, has been charging ahead, drawing more and more attention from investors here who would have traditionally bought Singapore shares.
Then SGX chairman Kwa Chong Seng did not hold back when shareholders questioned the local market’s state during the bourse operator’s AGM in October last year. The exchange, he said then, has more roles to play than to focus just on local businesses.
True to form, SGX announced a few weeks ago a new structure to streamline all asset classes under its coverage to improve engagement with investors across the board. From Oct 1, its global markets division will directly oversee equities, fixed income, currencies and commodities. The announcement came shortly after SGX’s global head of equity capital markets, Mohamed Nasser Ismail, would leave at the end of October for other opportunities following a nearly two-decade tenure.
What SGX’s new structure would mean for Singapore stocks remains to be seen. Come Oct 5, Singapore Inc. stalwart Koh Boon Hwee will be chairing SGX’s AGM for the first time. Let’s see if he has a new plan to take things forward. Until then, we’ll likely see more of the same in the local market — apathy.