Monday, 9 December 2013

Innopac, IPCO and Blumont Group commit securities fraud

Australia is not the sole domain of listed investment company fraud and regulator complicity. In Singapore, a group of listed investment companies has formed a giant securities fraud cartel. Innopac (I26.SI), Blumont Group (A33.SI), IPCO (I11.SI), LionGold (A78.SI) and Asiasons (5ET.SI) engage in revaluation fraud and circular investment schemes. The cartel builds massive crossholdings, engages in fraudulent related party transactions, falsifies NTAs, and manipulates stock prices. After ramping its shares, Innopac made a bid for ASX-listed Merlin Diamonds (MED.AX), as this blog mentioned in April 2013.

Innopac and its accomplices deliberately ramped its share price far beyond asset backing. It is during such a ramp that granny investor money is stolen, not during the inevitable crash to fair value. In October 2013 the share prices of the Singapore listed investment scams collapsed, perhaps because they had been warned by the complicit regulator that their scam was getting embarrassingly obvious.

Just like its Australian counterparts, Singaporean regulators have made no attempt to prosecute the criminals, preferring to pretend the share ramps were inexplicable magical market mysteries instead of fraud. Singaporean regulators have de facto become accomplices to the criminals, covering their tracks and protecting them. Just like in Australia, there is no free press to expose the criminals. In both Singapore and Australia, the rich and powerful criminal operators of listed investment scams have subverted the system to the point where a small investor has zero recourse to the law. Now the first lawsuits from the scam have started arriving in Singapore and Britain.

In Australia, Blumont Group has stakes in Cokal (CKA.AX) and Celsius Coal (CLA.AX), and is being sued for reneging on an investment in Prospect Resources (PSC.AX).

To be entirely clear and specific here: Innopac, Blumont, IPCO, LionGold and Asiasons are criminal organizations, vehicles of securities fraud run by criminals that consider themselves above the law. Singaporean regulators are complicit morons and are protecting the criminals. The ramps were not magical market mysteries, they were fraud. Any investor that lost money due to the regulator's astounding incompetence and complicity can expect zero justice. But in the extremely unlikely scenario that the criminals one day face justice, the regulator accomplices should be lined up right next to them.


  1. Your LIC's might have more in common with share - sorry - gold miners than you think. Turns out another fraud going by the acronym CTO had a placement from Liongold. Several of LionGold's people are now on the 'team' taking fees. Despite never turning a profit, rather losses year in year out, CEO gross pay is near $500 000 per annum.

    Total assets are written up as near $208 million, but $205 million of that is listed as non current (whatever that means) property, plant & equipment. I wouldn't be the least surprised if the actual liquidation value was half that.

    It's tempting to say that LionGold got diddled but maybe that's not the real point of the exercise.

    1. Yeah the similarity is striking; in both cases the success of the enterprise is dependent not on operations or fundamentals but on the ability to issue shares on false premises.

      The LionGold criminals did not get diddled if they paid with ramped shares. The analogy would be buying fake gold with counterfeit money, leaving both criminal parties with inflated assets based on which they can issue shares to suckers.

  2. Is it not possible that LionGold doesn't give a shit whether CTO ever turns a profit? They have positions on the board & take fees for doing sweet FA.

    The cash from the placement came from shareholders, to whom LionGold has no legal obligation. If its share price goes to zero they will probably just come up with a new name and fleece more chumps. If CTO goes to zero then they've still raked in fees for a while.

  3. Replies
    1. Ah ok then. Well its not as sweet as paying with worthless shares, but as you point out, shareholder money cycled into director fees is nice regardless.

      I would still think LionGold would be looking to ramp the share price of CTO as far as possible. The majority of listed investment scam fees comes from inflating the asset backing of the company.

  4. That makes sense. Interestingly enough CTO received a price query from the ASX on December 4. Didn't manage to lift the share price much, probably too many fleeced investors desperate to sell into any rising bid.

  5. And here's another one which may interest. Drummond Gold, looks about as legit as HEG. It's got nothing yet has just managed a placement of 155 million shares to Resource Capital Fund VLP or V L.P. (RCF).

    1. Ha! Looks like a great $0.001 stock. Can only go up