SINGAPORE (Apr 10): The Commercial Affairs Department (CAD) has begun its investigations into Midas Holdings.

See: Midas audit committee lodges report with CAD over China ops; SGX RegCo looking into matter

See also: Midas CEO Patrick Chew quits; stamp was used without his approval to take out loans

See also: Midas uncovers another lawsuit against Dalian subsidiary as unauthorised guarantor

Midas has received a notice dated Monday from the white-collar crimes division of the Singapore Police Force, saying the firm is being investigated for an offence under the Singapore Securities and Futures Act, according to a Tuesday filing signed off by Midas executive director Tong Din Eu.

The CAD has requested Midas to furnish certain documents and information concerning the group for the purposes of the investigation.

These included all records, documents and correspondences relating to the announcements issued by the company on Feb 8 2018, March 22 and March 27; financial documents from the relevant companies in the group as well as a detailed list of all persons who acted as the legal representative, general manager or financial controller of the subsidiaries involved.

In addition, all relevant computer equipment and corporate emails of the persons in the list as well as specimen signatures used by them between 2015 and 2017 were to be handed over.

Midas says it will extend its fullest co-operation to the CAD in its investigations and will make further announcements as and when there are further significant developments concerning the matter.

Meanwhile, the group has advised shareholders and potential investors to exercise caution when dealing in shares of the company.

Last Friday, Midas promised to hold a dialogue with minority shareholders by end April, even as the board tried to ascertain the group's cash balance and lawsuits against its subsidiaries in China.

See: Midas says trying to ascertain cash balance; promises to hold dialogue by end April

In the filing, executive director Xu Wei Dong said key information on the lawsuits filed by creditors and the financial health of the company were still being retained by the staff in China.

According to Midas' financial statement as of Sept 30, 2017, Midas held RMB 944 million ($197 million) in cash and a reported net asset value of RMB 4 billion.

Creditors of its China subsidiaries have sued Midas for some RMB452.2 million in claims so far.

Midas’ former executive chairman, Chen Wei Ping, is alleged to have taken out the unauthorised loans. The board on Apr 1 wrote to Chen, asking for his side of the story. He was given three days to respond, but did not do so.

See: Midas says Jilin subsidiaries shrugged off instructions to remit funds

On Apr 3, the Singapore Exchange banned Chen from serving as a director of any Singapore listed company for the next three years.

Meanwhile, SGX had also slapped a similar ban on Ma Ming Zhang, who replaced Midas former CEO Patrick Chew as legal representative for a key operating subsidiary back in April 2017.

A month later, this subsidiary, Jilin Midas, took out the unauthorised loans with a local state-owned micro-financing company.

See: SGX strips Midas chairman Chen and legal representative Ma of their appointments

Shares of Midas have been suspended since Feb 8. It last traded at 19.2 cents.