Timeline: Singapore’s investigation of ISR Capital For Mongabay.com by Edward Carver The ownership of Tantalum Rare Earth Malagasy (TREM), the company exploring for rare earth elements in northwest Madagascar, has been in flux since late 2015. ISR Capital, a Singaporelisted company, is in the process of taking a majority stake in TREM. In 2016, just before the announcement of its TREM acquisition, ISR’s stock price began a dramatic rise that lasted several months. When it later crashed, the Singapore stock exchange suspended trading of ISR stock. Singapore authorities connected ISR to an alleged mastermind of stock manipulation, and opened an investigation into the company. December 8, 2015: Tantalus Rare Earth (TRE AG), a German company that had owned TREM since 2009, agrees to sell TREM to a private Singapore-registered company now known as REO Magnetic in a two-part deal. (The second part, REO’s purchase of the last 40 percent, still has not been finalized at press time.) ISR Capital does not yet have anything to do with TREM. May 9, 2016: David Rigoll, a U.K.-based mining investor, enters into an agreement to buy more than a quarter of the shares of ISR Capital and a few days later joins the company as a director. Rigoll had until recently been an executive and leading shareholder of TRE AG. May 12, 2016: The Singapore stock exchange, observing an unusual increase in the trading of ISR Capital stock that could be a sign of insider trading or stock manipulation, asks the company if any information — about, for example, possible impending acquisitions — needs to be made public. ISR Capital replies “no.” May 19, 2016: ISR Capital’s share price has now increased by more than 700 percent in the tenday period since Rigoll signed on. May 20, 2016: ISR Capital announces a deal to purchase an as-yet undefined stake in TREM from REO Magnetic. After further negotiations, the agreement entails ISR purchasing a 60 percent stake in TREM for about $30 million, roughly seven times the price that REO had paid to TRE AG for the same stake a few months earlier. The Singapore stock exchange later questions ISR’s methodology in making the purchase at this price. (At press time this deal and the two-part deal between TRE AG and REO remain incomplete. But if they go through, ISR will ultimately own 60 percent of TREM and REO will own the remaining 40 percent.) July 16, 2016: In a filing, ISR Capital writes that TREM is applying for a pilot production permit. Madagascar’s National Environmental Office (NEO) gave TREM permission to conduct an environmental impact study, which the company must submit for approval before the NEO will issue a pilot production permit. No study has been turned in at press time, more than a year later, according to the NEO. August 14, 2016: ISR Capital acknowledges that Timothy Morrison, an executive at the advisory firm that ISR had hired for help with the TREM acquisition, was also a director of REO Magnetic, the company selling TREM. ISR had failed to disclose this information until regulators asked specifically about Morrison. This was a potential conflict of interest that may have allowed Morrison to sit on both sides of the table during the ISR/REO negotiations. ISR explains that when it conducted its records search on REO, Morrison was not yet a director there. In the same communication, the stock exchange asked ISR Capital about a potential conflict of interest linked to David Rigoll’s involvement with both TRE-AG and ISR Capital. In response, ISR writes that Rigoll’s investments in the two companies did not overlap. September 2016: TRE AG hands over management of TREM to REO Magnetic, now the majority owner of TREM, according to Markus Kivimäki, TRE AG’s CEO. September 29, 2016: With its stock price soaring, ISR Capital announces that it will loan TREM about $4.5 million. ISR is investing in the Ampasindava project even though its deal to acquire the 60 percent stake in TREM from REO Magnetic has not yet been finalized. November 2016: ISR Capital’s share price has now increased by more than 4,000 percent since April. November 8 2016: In response to a regulator’s inquiry, ISR Capital explains that it has loaned TREM money so that it can obtain environmental permits, which are critical to the project’s success. TREM needs $7.1 million to get environmental permits, ISR explains. ISR states: “…there are no significant risks to the Permits not being approved as [TREM] has addressed all 147 items highlighted by the National Environment Office in the scope of work submitted earlier this year. [TREM] expects to obtain the Permits in Q1 of 2017.” When showed this ISR filing, the National Environment Office’s environmental evaluation director wrote to Mongabay that he was “unaware of this.” At press time TREM has not received the pilot production permits. In fact, TREM no longer has even an active exploration permit. ISR does not appear to have revealed the lack of permits to investors or regulators. November 21, 2016: The Singapore stock exchange questions ISR Capital’s two valuations of the “Madagascar Asset” in Ampasindava. Both consultants valued the concession at over $1 billion dollars. However, the Singapore stock exchange rejected both valuations for failing to meet the exchange’s standards: the first was done by an unqualified sole proprietor, while the second copied some data from the first, without making a site visit to Ampasindava. The first valuation, by Geologica Pty Ltd, which was quickly promoted by ISR upon its completion in July 2016, discounted local opposition and environmental risk. “The potential land tenure risk, including Native Title risk is considered low, as is the sovereign risk associated with the concession,” the appraiser wrote. After a perfunctory look at potential environmental impacts, he added, “Geologica concludes that there is a low environmental risk associated with the concession.” November 24 and 25, 2016: Jon Soh Chee Wen, alleged mastermind of the penny-stock crash of 2013, is arrested and charged for his role in what Singapore authorities call “the largest market manipulation case in Singapore’s history.” ISR Capital is a penny stock — a high-risk stock investment that can be purchased cheaply — with connections to the 2013 scandal, and its price begins to plummet, losing more than half of its value in a day. Three days later, the Singapore stock exchange suspends trading of ISR stock. December 7, 2016: To investigate a potential violation of Singapore’s Securities and Futures Act, authorities demand copies of all of ISR Capital’s recent emails, meeting minutes, and merger deals. December 20, 2016: Singapore prosecutors confirm connections between ISR Capital and Jon Soh Chee Wen. They also announce that they are investigating ISR Capital. Eventually they will claim in a court document that Soh “was intimately involved in, and exercised influence over, the management and corporate affairs of ISR.” (Contacted by Mongabay, the Monetary Authority of Singapore declined to comment on the status or nature of the investigation.) March 6, 2017: After more than three months of suspension, the Singapore stock exchange relists ISR Capital after issuing a “trade with caution” warning. The stock plummets once more, and David Rigoll sells a significant portion of his shares. Rigoll also resigns as an executive director, criticizing management and becoming at least the fourth high-level ISR executive to resign in as many months. March 2017: TRE AG retakes operational control of TREM, on a temporary basis, due to what Kivimäki referred to as “certain challenges at the buyer.” April 28, 2017: ISR Capital confirms that it will move forward with the TREM acquisition. August 1, 2017: ISR Capital and REO Magnetic agree to new terms. Instead of paying $30 million for the 60 percent stake in TREM, ISR will now pay about $3.3 million. ISR is still awaiting a third appraisal of the Ampasindava concession. August 6, 2017: ISR Capital admits that the Ampasindava concession has a much lower value than the two earlier appraisals suggested. In the same document, ISR explains that “there have been limited exploration activities by the Operating Company [TREM] in the past months.” ISR again fails to mention that TREM has had no exploration permit since January. TREM staff in Ambanja told Mongabay there had been no exploration this year.