JADE - A Rare Gem to Catch?

Rare opportunity to get 100% profit return easily. My gut feel that this could be a catch... qn is who is buying the big volumes sold from ML today and tomorrow?


SGX yesterday declared Catalist-listed Jade Technologies a designated security, prohibiting any selling of the shares unless the seller can show he holds sufficient quantities.


SGX said the condition was not applicable to shares that have been bought on contra, adding the designation was to ensure 'orderly trading' in the market.

Investors are fearing a heavy selldown after Jade's group president Anthony Soh pulled the plug on his takeover bid for the company on Saturday, admitting that with two-thirds of his shares in Jade pledged to a failed Australian broker, he was no longer able to guarantee sufficient funds were available to facilitate the offer.

Dr Soh yesterday confirmed in an interview with BT that the offer is under internal investigation by the Securities Industry Council. The role of OCBC Bank, which quit as financial adviser to the offeror on April 1, when the storm broke, may also be reviewed.

SGX said shareholders who had accepted the offer from Dr Soh will have their shares transferred back to their accounts today when trading resumes. Trading has been halted since Wednesday.

Early last month, Dr Soh made a 22.5 cents a share conditional offer for Jade, stating he owned about 46.5 per cent of the company. Last week, it emerged he had pledged two-thirds of his stake, or about 30.5 per cent of Jade's share capital, to Australian broker Opes Prime as security for margin loans.

But under the agreement, ownership of the shares may already have passed to Opes and when it failed, on to its secured creditors. Dr Soh and other clients of Opes claim they believed their shares had only been pledged and that they retained beneficial interest but Opes is now known to have lent those shares to banks as security for financing.

With a much smaller shareholding than thought, Dr Soh said he could not guarantee he had the extra $67 million to satisfy full acceptances of the offer.

Dr Soh told BT that Opes had operated what seemed a very attractive lending regime, providing 60 per cent credit on the value of even small cap stocks. He first pledged about 140 million Jade shares last October and had drawn down the full amount of about $25 million in loans.

When the price of Jade shares tanked in late January, Dr Soh pledged about 150 million more shares to make up the shortfall but did not borrow any more money. 'It was a very fluid arrangement but it came at a very heavy price.'

He said he suspected Opes had been lending shares to third parties after finding out in February that about 40 million of the 295.5 million shares pledged had been moved to another account. Dr Soh visited Melbourne three times in late February and early March to confront Opes's chief executive officer Laurie Emini. 'Each time he said in front of his staff that I was the beneficiary.'

Dr Soh claimed he knew of 'five to 10 other clients of Opes' in Singapore who like him had pledged shares in locally listed companies to Opes to secure financing. He is now taking part in a class action to get compensation. 'There is probably no doubt that I've lost the shares.' Dr Soh put his paper losses at about $40 million.

He said that the fundamentals of Jade have not been affected, adding he was in discussions with a Chinese buyer and a big US investment bank to come in as partners in a coal mining project in Indonesia.

A recent independent report included in the now withdrawn offer for Jade had put the value of the coal concession at about $1 billion.