Singapore’s central bank sued Pheim Asset Management Pte Chief Executive Officer Tan Chong Koay and the fund manager’s Malaysian unit for manipulating the shares of a water treatment company.

Tan and Pheim Asset Management Sdn. bought almost 90% of the traded shares of Singapore-based United Envirotech from Dec 29 to Dec 31, 2004, according to a statement presented to Singapore’s High Court by the Monetary Authority of Singapore’s lawyers Drew & Napier LLC yesterday.

That created a “false or misleading appearance” of the market and the company’s stock, Cavinder Bull, a lawyer with Drew & Napier, said in the statement. The share purchase raised the net asset value of Pheim’s accounts, triggering outperformance bonuses of $50,790 and an additional management fee of $115, lifting the reputation of the fund manager, Bull said in the statement.

Pheim and Tan wouldn’t have been motivated by the “insignificant” amounts, according to a court statement from their lawyers.

They “had no intention to create a false or misleading appearance,” according to the statement. United Envirotech shares were undervalued and the purchases were “part of a legitimate and genuine investment strategy,” it said.

United Envirotech’s price movements during that period were “a reflection of genuine demand and supply,” and the stock was “illiquid” and “volatile,” according to the statement.