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Record number of companies put on MAS alert list last year

Record number of companies put on MAS alert list last year

Source: Straits Times
Article Date: 14 Jan 2021
Author: Joyce Lim

The list now contains 644 companies, including those registered overseas.

A record number of companies were placed on the Investor Alert List last year as the pandemic placed unprecedented stresses on financial markets.

There were 104 firms put on the list, up from 82 in 2019, as shown on the Monetary Authority of Singapore (MAS) website.

The list details companies that are not licensed by the MAS but may have given investors the impression that they were in fact sanctioned by the Singapore regulator.

The record numbers listed last year came amid the pandemic, which saw an increasing number of people begin trading on the stock market.

The Alert List now contains 644 companies, including those registered overseas, which may have been wrongly perceived to be regulated by the MAS.

The list has continued to grow this year with eight companies added, including five associated with Singapore-founded crowdfunding platform CoAssets Group.

CoAssets Group was in the news last month after its subsidiary CA Funding reportedly transferred US$30 million (S$40 million) in borrowings to Hong Kong-based Sunfit, a little-known debt recovery firm.

Once CA Funding - a crowdfunding lending platform - is wound down, investors could lose the money they put into the company.

Several police reports have since been filed against the company and its co-founders Getty Goh and Seh Huan Kiat.

The MAS had said it will take necessary action if CA Funding, the only entity under CoAssets Group regulated with a capital markets service licence, has breached regulations.

Assistant professor of finance Ben Charoenwong from the National University of Singapore Business School noted that it is important for regulators to play a "forefront and hard-handed role in keeping an eye on entities that may be masquerading as licensed entities when they are not".

"Even though most companies may be properly licensed, whenever a case like CoAssets pops up, it deteriorates people's trust in the financial system as a whole," said Prof Charoenwong, who specialises in financial regulation and investor management.​

In spite of the Covid-19 pandemic, the stock market performed fairly well last year, with shares in companies such as Tesla up more than 700 per cent.

Prof Charoenwong said: "After seeing gains like that, investors' sentiment rises, meaning people are more optimistic about the market.

"What do they want to do when they are more optimistic? They want to participate more. So they want to find ways to get access into the market."

He added that such demands from investors could drive some companies to market themselves as brokerages that may not be licensed. These firms may crowd together with the licensed entities to try to catch some business from these investors.

Prof Charoenwong urged investors to do their due diligence to find out if the broker or the company they are engaging is licensed.

They should also learn if the companies have proper custody and protection in place for their assets.

Singapore-based proprietary forex trading firm VentureSkies was added to the Alert List on Monday. Its website, which is no longer accessible to the public, showed various investment options and monthly returns of up to 15 per cent.

Prof Charoenwong warned that there is often a big gap between investors' expectations and reality, and there will be times when things seem "too good to be true".

Some platforms can be very lean in terms of operational cost, but these operators still have to make revenue somehow and investors should do more research to find out how these entities are making their profits.


  • 644

  • Number of companies on the Investor Alert List, which details companies that are not licensed by the MAS but may have given investors the impression that they were in fact sanctioned by the Singapore regulator.

Source: Straits Times © Singapore Press Holdings Ltd. Permission required for reproduction.

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