Magnus Energy shares fell 7.7% as legal woes worsen over unpaid debt: Bloomberg

Blumont, Asiasons and DMG experienced sudden declines.

A Bloomberg report revealed that a Deutsche Bank AG (DBK) brokerage sued the managing director of Magnus Energy Group Ltd. (MAGE) in Singapore to recover an unpaid trading debt.

Lim Kuan Yew of Magnus Energy owed DMG & Partners Securities Pte S$1.77 million ($1.4 million) for Blumont Group Ltd. and Asiasons Capital Ltd. shares bought in October, according to a lawsuit with the Singapore High Court. Singapore trading rules allow investors three days to pay for their stock purchases.

Bloomberg adds that the Monetary Authority of Singapore and the police are investigating suspected stock-trading irregularities related to drops in Blumont, Asiasons and LionGold Corp. in early October 2013 that slashed $6.9 billion off the combined value of the shares. Magnus has been asked to assist in the probe, including providing electronic data and trading records of two executives.

Here’s more from Bloomberg:

Magnus Energy has said its business won’t be affected by the probe. Magnus Energy fell 7.7 percent to 1.2 Singapore cents as of 12:01 p.m. in trading in the city, extending this year’s slump to 64 percent.

DMG’s lawyers have tried unsuccessfully on three occasions to serve the lawsuit on Lim in Singapore, according to court papers filed last month. The brokerage said in court papers it’s attempting to serve Lim in Malaysia, where he’s believed to be residing.

Asiasons, Blumont and LionGold have said they don’t know what caused the sudden declines, which spurred brokers to clamp down on margin lending and dented trading sentiment.