Hot stock: SGX queries Raffles Education after shares jump 26%

PRIVATE education provider Raffles Education Corp said it is unaware of any reasons for "unusual price movements" of more than 30 per cent that prompted the Singapore Exchange (SGX) to query the company on Tuesday.

The counter began the day at 11.4 Singapore cents, and rose to 15.1 cents as at 2.31pm. It hit an intraday high of 15.8 cents just before market close, and closed at 15 cents, up 3.6 cents or 31.58 per cent from the day before.

SGX at 2.33pm asked Raffles Education if it was aware of any information not previously announced concerning the company, its subsidiaries or associated companies which might explain the trading. It also asked the company to provide any possible explanation for the trading.

Raffles Education said it was not aware of any such information, or of any explanation for the unusual trading activity. It confirmed its compliance with the listing rules and Mainboard Rule 703 in particular.

Last week, Raffles Education said it had received a notice of requisition from several shareholders - including Indian edtech businessman Shantanu Prakash and tycoon Oei Hong Leong - calling for a special auditor to be appointed to review the circumstances surrounding the company's joint venture with Mr Prakash's India-listed Educomp Solutions, on concerns of wrongdoing, including alleged forgery and extortion.

The shareholders asked that the auditor look into whether there were any "irregularities" committed by Raffles Education directors, which gave rise to Mr Prakash's complaint with the Commercial Affairs Department (CAD) of the Singapore Police Force.

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The complaint relates to whether Raffles Education founder Chew Hua Seng, his spouse Doris Chew, son Chew Han Wei and other directors had "colluded and conspired to fraudulently fabricate and forge documents towards extortion of Mr Prakash for land grabbing in India".

Raffles Education chairman and chief executive officer Mr Chew subsequently said in a statement that, to his knowledge, there is no CAD investigation against him, his wife or his son. He also noted that Mr Prakash and Educomp are being probed by India's investigation agency for major corporate fraud.

In September 2015, Raffles Education had commenced arbitration proceedings against Educomp at the Singapore International Arbitration Centre.

The arbitration tribunal in April 2017 awarded Raffles Education damages of 16.32 crore rupees (S$3.1 million) plus 5.33 per cent interest. The mainboard-listed company has initiated enforcement proceedings in India to recover these sums, and commenced a lawsuit in Singapore against Mr Prakash in relation to the arbitration award.

Six of the seven resolutions proposed in last week's notice were also the same as those listed in an earlier notice sent on Aug 17 by Mr Oei and his firm Oei Hong Leong Art Museum, Raffles Education had said. They included requests to remove Mr Chew as chairman and chief executive of Raffles Education, and to appoint an auditor to review the circumstances surrounding all loans from Mr Chew.

Mr Oei is also trying again to get the company to appoint an auditor to review the circumstances surrounding the handwritten "confidential agreement" dated Oct 16, 2017 and signed by him and Mr Chew.

The billionaire had relied on this handwritten note to sue Mr Chew for allegedly reneging on his promise to get a buyer for his shares. The High Court dismissed the lawsuit in February this year. The Court of Appeal this month also dismissed Mr Oei's appeal against that judgment.