Published January 5, 2009

Alphomega CFO faces second investor lawsuit

Investors claim he misled them during roadshows into thinking UBS was investing

By JAMIE LEE

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THE chief financial officer of former OTC-listing Alphomega Research Group is facing a second lawsuit from minority investors, who claim that he had misled them into thinking UBS was investing in the company during roadshows.

Alphomega, which specialises in construction material testing, has been eyeing micropiling work - a form of construction work commonly done during upgrading - that CFO Goh Jon Keat expects to help ramp up profit margins.

This follows a similar suit filed earlier by another group of investors who are suing CFO Goh Jon Keat for alleged misrepresentation and are claiming their investments back.

This new group of seven investors claim that they were 'induced' to invest a total of $240,900 in 2007 by Mr Goh, who allegedly presented 'positive representations'. They are seeking a full refund of their investments.

'Sometime in mid-2007, the defendant and other personnel were actively organising and participating in roadshows...it was represented to those who attended that UBS would also be investors in Alphomega,' noted court documents obtained by BT, with the investors claiming that the representations were later found to be false.

The investors are also suing Mr Goh for claims that he had 'compromised' the operations of Alphomega because of the 'serious differences' among the board of directors, including the ex-CEO Tan Choon Yong. They also allege that the company was terminated on the OTC because Mr Goh did not comply with the requirements set for an OTC listing, thus rendering their shares 'worthless'.

Some of these plaintiffs were present at last week's annual general meeting, during which shareholders questioned why the company was looking to sell off its factory - now valued at $3.3 million - to repay the mortgage and boost cashflow. Some feared that the firm would become a 'shell' once the main asset is sold while others argued that having a negative operating cash flow was common for a business that was starting up.

Mr Goh declined to comment on these matters as they were part of the pending lawsuits, but told BT that he is confident of raking in more sales this year with a focus on the construction business. Alphomega, which specialises in construction material testing, has been eyeing micropiling work - a form of construction work commonly done during upgrading - that Mr Goh expects to help ramp up profit margins.

This is because the government is expected to spend more on construction and infrastructure projects during the recession, he said.

The company has signed a memorandum of understanding with a local construction and infrastructure company that is familiar with government tenders for such infrastructure projects, he told BT.

He added that he is 'confident' of receiving some orders from the company, if it is successful in bidding for upcoming projects.

Alphomega is also in talks with a private school originating from Europe to offer tertiary level classes, in a bid to boost their top line this year, said Mr Goh.

The company lawyer said Mr Tan and his wife were not 'removed' from the board, as stated in an earlier BT article, but were not re-elected by the board.