SINGAPORE (May 9): The past couple of months have been tough on direct selling firm Best World International. But now, it looks like even tougher times lie ahead.

From a high of $3.33 in February this year, shares in Best World have plunged more than 59% to $1.36 as at May 9, following attacks and doubts cast on its business and practices.

And now, Singapore Exchange Regulation (SGX RegCo) has slapped the distributor of skincare, nutritional and wellness products with a rare trading suspension — the first in close to 30 months.

In an announcement on May 9, SGX RegCo said the trading suspension will continue until the regulatory arm of the bourse has completed its investigations into “the veracity of [Best World’s] China sales”.

The last time SGX RegCo made this move was in November 2016, when it suspended ISR Capital, a firm whose shares were alleged to have been manipulated by John Soh Chee Wen, who is on trial. His alleged co-conspirator Quah Su-Ling is the sister of Quah Su-Yin, then CEO of ISR Capital.

On Feb 18, Best World called for a trading halt, after a report painting a shroud of secrecy over its 28 franchisees was published in The Business Times. The newspaper claimed the company’s director and chief operating officer, Huang Ban Chin, refused to disclose the franchisees’ names and exact store locations, which were then not listed on its website. In response, Best World appointed PwC to conduct an independent review on its business and accounting practices.

But investors were clearly unimpressed.

Shares in Best World slid as much as 21% on Feb 25 as it resumed trading following the halt.

The company called for another trading halt on April 24, after its share price tumbled 9% following the release of two damning reports on the same day by two separate short sellers — Bonitas Research and Valiant Varriors — presumably working in concert.

Bonitas called Best World a “fraud” and alleged that the group’s sales in China were a fraction of what was reported to its shareholders. Meanwhile, Valiant alleged that Best World continued to engage in a multi-level marketing scheme in China, which is illegal.

In an email to The Edge Singapore on the same day, SGX RegCo said it expected the company to call for a full independent review of all matters raised in the Bonitas report.

Before the market opened on May 9, Best World issued a statement to “strongly refute” the allegations by Bonitas, and said it had commenced defamation proceedings against Bonitas and its founder. It also requested that the trading halt be lifted.

Separately, the group announced a 79% jump in 1QFY2019 earnings to $10.3 million, on the back of higher revenue, which more than doubled to $53.4 million from $24.6 million a year ago.

But the rosy earnings report was completely brushed aside. Both Bonitas and Valiant were already primed and ready. Within hours of Best World’s May 9 rebuttal, Bonitas said it stood by its earlier report and disclosed that it had more evidence.

Valiant, meanwhile, posted photographs taken from personal Facebook pages to show that one Koh Kim Chuan, the legal representative and shareholder for Best World’s major primary import agent, Chang Sha Best, was the brother-in-law of Best World group CEO and managing director Dora Hoan. Best World had stated in its rebuttal that there were no links with the agent.

Shares in Best World promptly fell another 16% on May 9, before SGX RegCo suspended trading in the counter at 3.14pm. Before the shares were suspended, the company bought back nearly 4.9 million shares at prices ranging between $1.32 and $1.75, costing nearly $7.8 million.

After market close on May 9, SGX RegCo issued yet another query to Best World. Among other things, the company was asked to clarify whether Koh was indeed Hoan’s brother-in-law, and when Best World commenced dealings with the primary import agent.