By Goh Eng Yeow, Senior Correspondent

TO SOME people, the stock market seems to behave more like a giant casino than a measured forum for the rational trade in shares.

Make the right bet and you stand to win a pile of money without even having to work for it. But you can also lose your shirt if the company you have invested in goes belly-up.

It is not hard to see how the casino image has arisen, especially after the madcap antics of the past 18 months, which have been amplified by any number of TV news shows or dramas.

Take the Korean hit East Of Eden now airing on cable TV here.

In one episode, the hero - movie hunk Song Seung Hun - was told by his boss, an underworld figure who owned casinos, to start infiltrating the stock market.

The boss saw the stock market as simply a lucrative extension of the casino business already under his thumbs.

Okay, that's fiction, but it does not help when dirty linen at firms like

Sino-Environment is being aired like a soap opera on SGXnet - a Singapore Exchange (SGX) website that lets companies keep investors posted on their corporate developments.

The Sino-Env drama comes complete with police reports in Singapore and China about cash missing from the company's bank balances, auditors probing irregularities being chased off bank premises, and attempts by its beleaguered chairman to take his assets out of creditors' reach.

So the healthy scepticism that the layman may have about the stock market is understandable.

But those who have benefited from investing in equities will argue that rather than being a casino, the market is a conduit allowing investors to put their money into promising firms which reward them with handsome dividend payouts when the businesses take off.

At the heart of every major bourse is a myriad of rules to protect investors. They are guided by an important principle - the need for firms to make full and timely disclosures about their accounts and their businesses.

Without this, a sensible investor will be loath to part with his money because he does not know if he is making a tangible investment or getting into a charade.

And when investors fail to heed this rule, they often live to regret it. One example is fraudster Bernard Madoff, who pulled off a US$50 billion (S$69 billion) scam because those who entrusted their money to him failed to press for full disclosure on how he could produce such consistently good returns.

Because investors like to be kept informed, they reward those who keep them posted and punish those who ambush them with unexpected developments.

Investors and creditors have come to expect a high level of disclosure, so they do not like surprises. Bad news is never welcome, but is even harder to stomach if the bearer has been less than forthcoming about it in the first place.

The price to pay for springing such surprises is a loss of trust but there is often a financial cost as well.

This is what makes the Sino-Env saga so worrisome.

As far back as March, investors were already aware of its chairman Sun Jiangrong's financial misadventure when he defaulted on a personal loan, and the chaos that might ensue because bondholders could press the company for early redemption of a $149 million loan.

But it was not until the SGX threatened to delist the firm last month following the sacking of its financial controller that investors got details of the alleged fraud that might have been perpetuated by its bosses.

What is particularly damaging is the way Sino-Env's China-based

bosses used SGXnet to make a series of allegations against the sacked financial controller.

It raises an important question: Should such allegations be aired over SGXnet, whose purpose is to give a platform to listed firms to keep investors posted of material developments?

To make matters worse, Sino- Env's Mr Sun disclosed to a third party - the president of the Securities Investors Association (Singapore) (Sias), Mr David Gerald - that his financially troubled company had $40 million in an unnamed bank account.

Sino-Env had to back-pedal when it was queried by the SGX.

As the SGX rightly pointed out, such information 'is material and has been selectively disclosed to certain parties'.

One might add that in making disclosures in such a selective manner, it makes a mockery of efforts to level the playing field by ensuring that all investors have the same access to material information simultaneously.

In allowing itself to be used as the conduit for such selective disclosures, Sias undermines the interests of the retail investors it serves.

Chaos will ensue on the stock market if other bosses follow the Sino- Env chairman's footsteps and start disseminating material information outside SGXnet.

That would make the task of verifying the authenticity of the information being disseminated far more difficult.

Questions have also been raised on how to protect the sanctity of SGXnet to ensure that it stays as a serious platform for companies to make their material disclosures.

Should companies' management be allowed to air their grievances on SGXnet and turn the website into a soap opera channel?

The SGX needs to tackle this issue to protect the integrity of SGXnet. That would assure the layman that the integrated resorts - and not the stock market - are where gamblers should go.

Cai Jin runs every Monday and covers financial matters and corporate governance issues that can affect investors. The two Chinese characters marry wealth with good fortune - the two crucial factors that any investor needs to prosper.