SINGAPORE (Feb 20): Vividthree Holdings’ planned acquisition of a company owning the “Silent Horror” comic rights has spooked SGX RegCo into issuing a “trade with caution” warning on this counter on Feb 20.

The exchange has detected indications that a small group of investors seem to have accounted for 90% of the trades made on this stock between Sept 9 last year and Feb 19.

“The individuals behind these accounts appear to be connected to each other. In addition, these accounts appeared to have traded among themselves during the period reviewed,” states SGX RegCo.

Their cross trades accounted for 71% of on-market traded volume. Out of 111 active trading days, these accounts engaged in cross trading activity on 94 days.

On Feb 12, Vividthree announced a placement of up to 15.88 million shares at price of at least 12.6 cents each, which is at a premium of 27.3% to the volume weighted average price of 9.9 cents on the date of the placement agreement.

The placement will raise some $2 million and a third of the proceeds is to go into acquisitions.

Soochow CSSD Capital Markets (Asia) has been appointed the placement agent.

The placement will be on a best effort basis by the placement agent and subject to Vividthree and the placement agent entering into a pricing supplement by April 30 2020.

SGX RegCo notes that the announcement of the placement followed a decline in Vividthree's share price since mid-January 2020. 

Throughout this period, the volume of cross trades between these accounts progressively increased. 

“SGX RegCo is working closely with the authorities on the matter – suggesting that investigations have commenced.

Vividthree shares closed at 9.8 cents on Feb 20, up 3.6%.

Just two days earlier, two brokers were convicted for their roles in manipulating shares of Koyo International back in 2014.

They were allegedly part of a scheme of more than 50 trading accounts buying and selling shares of Koyo among themselves, more than doubling the share price, before a trade with caution by SGX RegCo triggered a crash from more than 30 cents to a fraction of that.