HK stockbroker denies links with US banker

PUBLISHED : Wednesday, 19 May, 2010, 12:00am
UPDATED : Wednesday, 19 May, 2010, 12:00am

Local stockbroker SBI E2 Capital has denied it has links with Shelly Singhal, a American investment banker who was indicted by the United States Federal Bureau of Investigations for securities fraud last month.

The denial came in response to an investigation by corporate governance activist David Webb, who found through stockmarket filings that past ownership of companies connected to SBI could be traced back to Singhal.

The corporate governance activist also said Singhal was an officer of an SBI E2's securities trading business until last April.

Singhal was charged by US authorities on April 27 with buying control of three public companies, then sending mailouts to clients of his American investment banking firm exhorting them to buy the stocks, an FBI press release said.

Responding to Webb's allegations, Billy Cheung, the head of corporate finance at SBI E2 Capital, said Singhal was not a shareholder of his company any more.

Cheung said Singhal had sold the interests he formerly had in SBI E2, but Cheung did not disclose who now owned the broker, which is an active underwriter of local initial public offerings.

Singhal owned a British Virgin Islands vehicle named Clear Smart Enterprises. In November 2007, Clear Smart, through another intermediate holding company, owned SBI E2-Capital Asset Management Ltd, one of five companies in the SBI E2 family that is licensed by Hong Kong's Securities and Futures Commission.

As recently as September 2008, Clear Smart also owned a business named 'SBI E2 Capital Limited', a Cayman Islands company. SBI E2 Capital was formerly called Goodwill Financial Holdings. And Goodwill, Webb reported, was the past owner of a commodities broker, a corporate finance adviser and two stockbrokers that are currently licensed entities of the SBI E2 group. Singhal could not be reached for comment.

Webb also alleged that SBI E2 Capital's founder and chairman emeritus Sin Just Wong, a well-known figure in the local business community, in 2008 accepted an honorary doctorate from an unaccredited American university - one that is not recognised by most major employers. Wong told the Post he had not known the institution, named York University of Alabama, was not accredited.

'If it is unaccredited as ... Mr Webb has claimed, then I would not use [the title] anymore,' Wong said in an e-mail to the Post.

SBI E2's Cheung said he was unable to disclose who the stockbroker's current owners were because it is a private company.

'I am not sure of the legal position on disclosing this,' he said.

Wong said he did not know who now owned SBI E2 Capital. He added that he had resigned from 'various SBI E2 Capital entities in 2007-8'. The Malaysian businessman remains an officer of the stockbroker's asset management business, but said yesterday he was shortly to resign.

A spokesman for the Securities and Futures Commission declined to comment.