KUALA LUMPUR: Interactive Brokers (IB), the US-based broking giant will have to wait 15 months or more before it can recover the US$68 million (RM218.96 million) it lost in the crash of  three stocks listed on the Singapore Exchange in October.

Singapore’s Business Times reported last Thursday that IB had filed for arbitration in November against 10 individuals and entities related to the collapse of the three stocks — Asiasons Capital Ltd, Blumont Group Ltd and LionGold Corp Ltd —  through the American Arbitration Association (AAA).

According to AAA statistics, cases involving a disputed amount of over US$10 million took an average of 15 months, from the initial filing phase to the arbitration award phase.

The report said IB had obtained interim court orders to freeze the assets of eight individuals, including directors and shareholders of Asiasons, Blumont, LionGold and Innopac Holdings, while the arbitration case is pending.

According to the report, on Nov 8, IB sought to freeze the assets of Malaysians Neo Kim Hock, Peter Chen Hing Woon, Tan Boon Keat, Quah Su-Ling, Lee Chai Huat and Kuan Ah Ming; and two British Virgin Islands-registered companies, Sun Spirit Group Ltd and Neptune Capital Group Ltd. One of the eight defendants sought to have the injunction discharged last Tuesday.

Though the case was filed with AAA, IB was reported to have asked for Singapore to be the seat of arbitration for the 10 cases. An emergency arbitrator has been appointed, according to the report.

Among the eight individuals whose assets were frozen is Neo, an executive chairman of Blumont. As at 2012, he held more than 20% of Neptune, which in turn controlled 50 million shares of Blumont and a 1.7% stake in LionGold.

Quah is the CEO of Ipco International, which held a 9.7% stake in Blumont as at March 2013. She personally held 2.15% equity interest in Blumont as at March 18 this year. Sun Spirit, a wholly owned subsidiary of Ipco, is a stakeholder in both Blumont and LionGold.

Chen is director of business and corporate development at LionGold and an Asiasons shareholder, with a 2.09% stake as at March 28. His assets were also frozen following the injunction obtained by IB.

IB’s lawsuit is the latest development in the Blumont-Asiasons-LionGold saga, which started when share prices of the three companies collapsed within two days from Oct 4. This led to intervention by the Singapore Exchange (SGX), a first in five years, and a probe into the circumstances of the trading in the stocks by the Monetary Authority of Singapore and SGX.  

It was reported that within days of her assets being frozen, Quah on Nov 20 filed a suit in the UK against Goldman Sachs International, claiming the bank was unreasonable in its demand for the repayment of a S$61 million (RM156.65 million) loan facility for which her holdings in the three stocks had been pledged as collateral. It was reported that about 28 million of Quah’s Asiasons shares and 29 million of her LionGold shares were force-sold from Oct 2 to 23 for a total of S$19.4 million.

Blumont executive director James Hong Gee Ho and LionGold independent director Ng Su Ling  have also filed a suit in the UK against Goldman with claims similar to Quah’s.

This article first appeared in The Edge Financial Daily, on December 2, 2013.