Substantial Raffles Education shareholder Oei Hong Leong sells an around 2.8 percent stake

Singapore two-dollar bills

Oei Hong Leong, a substantial shareholder of Raffles Education, sold around 38.93 million shares of the company in a market transaction for around S$2.7 million on Monday, according to a filing to SGX on Tuesday.

Raffles Education requested a trading halt on its shares before the market open Tuesday, pending an announcement.

The disposal of shares took Oei’s direct stake down to 4.2 percent from 7.02 percent previously, the filing said. He is also deemed interest in a 3.14 percent stake in Raffles Education. His total interest fell to 7.34 percent from 10.16 percent previously, according to the filing.

On Monday, SGX had queried the company about potential reasons for its shares plunging 25.61 percent to close at S$0.061.

In response to the query about the unusual price movements of the shares, Raffles Education pointed to a Straits Times article published Monday saying a letter from Oei was “widely circulated through the market on Monday.”

In the letter, which was published online, Oei criticized Raffles Education Chairman and CEO Chew Hua Seng for hiring “all his adult members of his family at high salaries”

Raffles Education said in the reply to SGX: “The company views the OHL Letter as containing bare allegations and material inaccuracies which are not substantiated. The company is taking legal advice and intends to respond to the OHL Letter in due course.”

The company had added it wasn’t aware of any other explanation for the unusual trading activity.

Raffles Education’s shares had already been under pressure, as earlier this month, its independent auditor, BDO LLP, had cited the financial statements for the fiscal year ended 30 June for a material uncertainty over whether the company can continue as a going concern. As of end-June, the group’s and the company’s current liabilities exceeded current assets by S$196.4 million and S$96.8 million, respectively, the auditor noted.

Read more: UPDATE: Raffles Education shares plunge after major shareholder Oei Hong Leong criticizes CEO hiring family members