Friday, 22 September 2017

Bumi Armada loses court case

Bumi Armada (defendants) lost its court case against Tozzi Industries (plaintiff), according to this judgment:

For the foregoing reasons, we grant the plaintiff’s claim against both defendants with damages to be assessed. We also order the defendants to bear the costs of this trial on liability, to be taxed if not agreed following the assessment of the damages. Costs of the assessment will be dealt with separately.

Probably nothing major, but still noteworthy.

Wednesday, 13 September 2017

Raising the bar for SGX delistings

Article in The Straits Times, some snippets:

For a company to be voluntarily delisted, a shareholders' meeting must be held where approval for the move must be received from 75 per cent of the shareholders present and where not more than 10 per cent disagree with the move.

The snag is that this feat is made easier because the listing rules here do not bar directors and major shareholders from voting - and since the major shareholder, usually also the company boss, is the party proposing the delisting move, the odds are stacked heavily against minority shareholders.

In recent years, however, some companies are being taken private at a very low valuation at the bottom of the business cycle, only to be relisted in another jurisdiction at a much higher valuation.

No wonder, some minority shareholders feel existing listing rules fail to give them adequate protection if an opportunistic major shareholder wants to delist the company and attempt to squeeze them out of their shares at unattractive prices.

..... the academics observed that there had been instances of IFAs assessing offers as being "fair and reasonable" even when the exit offer in question was at a steep discount of more than 30 per cent to the latest NAV of the takeover target.

Against this backdrop, I would say that the SGX listing manual is due for an overhaul.

Delistings have become a red-button issue among aggrieved minority shareholders. It is one area that urgently needs to be looked into when the rule book is revamped.

The same applies to Bursa, a revamp is needed in which minority investors receive more protection from delistings at a very low price, it is long overdue.