With bank credit more difficult to come by these days, some remisiers have started to act as middlemen - putting potential borrowers in touch with clients with spare cash.
Borrowers pledge shares, worth several times the loan amount, with the remisier, while lenders are promised better returns than what banks are paying.
A sweet deal all round? Not always. Such loans are generally not sanctioned by the broking houses which the remisiers work for, and run the risk of going sour.
One such loan for US$200,000 ($305,700) to a director of a public-listed company here, allegedly brokered by a remisier for a major broking house here, has ended in a police report being filed.
The two lenders, one who put up US$150,000 and the other US$50,000, claim they have not been repaid.
Today has seen the police report and is withholding the names of the parties involved as investigations are ongoing.
When contacted, a director at the broking firm named in the police report told Today the alleged deal “appears to be a private arrangement”.
The director added: “However, should we discover the remisier in question has breached any of our rules or those of the Singapore Exchange, he or she will be dealt with accordingly.”
The remisier in question declined comment on the advice of lawyers.
The US$200,000 was to have been invested in a Chinese media company, which was set for a listing in the United States or Hong Kong.
The borrower, who holds a Malaysian passport, was to have repaid the loan in six months with interest, which one of the lenders claimed was 20 per cent if the listing succeeded.
The listing did not happen but under the deal, the lenders were still to have been paid interest at the prevailing market rate.
According to the police report, the two lenders met the remisier and the borrower at People’s Park Centre on March 3 at 1pm. At the meeting, the borrower told the lenders that he was unable to repay the loan and tried to persuade them to buy over the shares he had pledged with the remisier.
The report, filed by one of the lenders several hours later, states that the remisier disclaimed any responsibility for the deal.
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Loan deal turns sour?
Police report lodged as lenders cry foul
Conrad Raj, TODAY
19 March 2009
With bank credit more difficult to come by these days, some remisiers have started to act as middlemen - putting potential borrowers in touch with clients with spare cash.
Borrowers pledge shares, worth several times the loan amount, with the remisier, while lenders are promised better returns than what banks are paying.
A sweet deal all round? Not always. Such loans are generally not sanctioned by the broking houses which the remisiers work for, and run the risk of going sour.
One such loan for US$200,000 ($305,700) to a director of a public-listed company here, allegedly brokered by a remisier for a major broking house here, has ended in a police report being filed.
The two lenders, one who put up US$150,000 and the other US$50,000, claim they have not been repaid.
Today has seen the police report and is withholding the names of the parties involved as investigations are ongoing.
When contacted, a director at the broking firm named in the police report told Today the alleged deal “appears to be a private arrangement”.
The director added: “However, should we discover the remisier in question has breached any of our rules or those of the Singapore Exchange, he or she will be dealt with accordingly.”
The remisier in question declined comment on the advice of lawyers.
The US$200,000 was to have been invested in a Chinese media company, which was set for a listing in the United States or Hong Kong.
The borrower, who holds a Malaysian passport, was to have repaid the loan in six months with interest, which one of the lenders claimed was 20 per cent if the listing succeeded.
The listing did not happen but under the deal, the lenders were still to have been paid interest at the prevailing market rate.
According to the police report, the two lenders met the remisier and the borrower at People’s Park Centre on March 3 at 1pm. At the meeting, the borrower told the lenders that he was unable to repay the loan and tried to persuade them to buy over the shares he had pledged with the remisier.
The report, filed by one of the lenders several hours later, states that the remisier disclaimed any responsibility for the deal.
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