Press Statement: SIAS calls on directors to declare independence and Fincantieri to improve its offer

Date: May 15, 2018

SIAS welcomes SGX Regco’s decision to require Vard to convene another EGM and to correct the irregularities in Delisting Circular following the botched EGM for the delisting of Vard held on 30 April. This historic action by SGX Regco highlights the importance of protecting minority interests as Fincantieri, the offeror already has over 83% control of the shares. While the company and its advisors highlight that the impact of the inaccurate independent financial advisor’s (IFA’s) report would not change their recommendation, due process must be adhered to and the interests of minority shareholders cannot be dismissed.

SIAS notes that SGX RegCo has required an updated IFA Letter and has called on the IFA to take into account the latest developments of the Company. However, many minority shareholders have expressed their unhappiness to SIAS as they are of view that the earlier IFA recommendation on the offer as “not fair but reasonable” is a misnomer and assert that an offer that is “not fair” cannot be “reasonable”, especially when factors accessed by the IFA shareholder assert, are the result of the very actions of the offeror. Shareholders feel that the recommendation may be incongruous, currently the rules allow for such a recommendation to be made. Nevertheless, since the IFA’s view is “not fair”, shareholders always have the right to reject the offer.

In addition, minority shareholders have questioned the independence of the directors, specifically the independence of Mr Roy Reite, who is the Executive Director and CEO of Vard, which is a subsidiary of Fincantieri since January 2013. While the company has cited the recommendations do not contravene the Singapore Code on Takeovers and Mergers, SIAS is of the view that greater transparency, accountability and disclosure is required. As such SIAS calls on each director to disclose and state their rationale as to how each director is deemed independent or not, according to the spirit of the law and not the letter, in proposing the offer.

Many minority shareholders are sitting on shares that were purchased above the offer price. In the interest of moving from this deadlock with minority shareholders, coupled with the costs of maintaining Vard’s listing, SIAS calls on Fincantieri to better the offer so that it will be a win-win situation for all stakeholders. Otherwise the shareholders may not be inclined to accept the offer.

With many questions raised by minority shareholders regarding Vard’s delisting proposal, SIAS calls on the company to engage with shareholders on their issues. Shareholders can register their interest at with their contact details and particulars to be advised of any upcoming discussions.

David Gerald
Founder, President & CEO
Securities Investors Association (Singapore)