UPDATE: No Signboard: CEO placed on arrest amid investigation of share buyback

The No Signboard Seafood outlet at VivoCity mall in Singapore; taken in 2018.The No Signboard Seafood outlet at VivoCity mall in Singapore; taken in 2018.

This article was originally published on Thursday, 2 May 2019 at 8:55 A.M. SGT; it has since been updated to include comments from No Signboard’s board of directors.

Iconic chili crab restaurateur No Signboard Holdings said Thursday the Commercial Affairs Department (CAD) of the Singapore Police Force informed CEO Lim Yong Sim that he was placed on arrest and bail amid “reasonable suspicion” of securities violations.

That was amid an ongoing investigation believed to be related to an abortive share buyback the company’s CEO ordered in January.

The CAD had pointed to sections 197 and 218 of the Securities and Futures Act, No Signboard said. Those sections relate to creating a false appearance of active trading, whether knowingly or recklessly, and trading with insider information.

Lim has not been charged with any offense, No Signboard said.

As a clarification on its previous announcement on the CAD investigation, the company said that copies of documents were provided to the police under section 35 of the Criminal Procedure Code. That gives police the power to seize property believed to be evidence of an offense.

Earlier this week, No Signboard had said it had provided the documents as part of its cooperation with the investigation, without being seized.

The chili crab maker reiterated that its operations were continuing as usual, and that it would continue to cooperate with the CAD.

In a separate filing Thursday afternoon, No Signboard said its board’s nominating committee believed the CEO and its chief financial officer, who has also given a statement to the CAD, were able to continue with their duties.

“The nominating committee will re-assess its position as and when there is any basis to do so,” No Signboard said.

On 31 January, the company’s shares jumped 23.97 percent to the day’s high of S$0.15 in a surge of volume, before No Signboard requested a trading halt during the mid-day break.

In response to the SGX query, No Signboard said that shareholders had approved a share buyback mandate at its annual general meeting on the morning of 31 January.

After the approval, Executive Chairman and CEO Lim had instructed the company’s brokerage, UOB Kay Hian, to queue to buy shares at a price of up to S$0.14, with a total of 1.07 million shares purchased as of 12:12 P.M. SGT on Thursday, 31 January, the filing said.

At the time, No Signboard had called it an “honest mistake” by Lim as he hadn’t realized the purchase price exceeded the allowable price cap under the share buyback mandate; in addition, the buyback also breached “black-out period” rules as its earnings results hadn’t yet been reported, the company had told SGX.

 

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