Date: April 13, 2015
SIAS notes that there are currently 36 companies on the SGX watch-list. It is our experience that not all retail investors seem to understand the significance of a company being put under it. They are not paying sufficient or any attention to these companies.
Under the SGX Listing Rules, the Exchange will place an issuer on the watch-list, if it records:
(a) pre-tax losses for the three (3) most recently completed consecutive financial years (based on the latest announced full year consolidated accounts, excluding exceptional or non-recurrent income and extraordinary items); and
(b) an average daily market capitalisation of less than $40 million over the last 120 market days on which trading was not suspended or halted.
Once on the watch-list, SGX require these companies to take active steps to meet the listing requirements and exist within 24 months from the date it was placed on the watch-list. When a company is unable to comply with SGX’s requirements to exit the watch-list, then the company faces suspension and forced delisting, by which time it is too late for minority shareholders. The shares would have lost value. It is usually at this stage that minority shareholders rush to SIAS for help. Minority shareholders must appreciate that the whole purpose of putting a company on the watch-list is to alert shareholders to pay more attention to such companies and to seek accountability from the Board and management on how the company plans to get out of the watch-list.
It has become clear, therefore, that there is a growing need also for SIAS to engage companies on the watch-list to discuss the company’s future plans and help communicate it to all shareholders. The intention is to better connect with shareholders, particularly, minority shareholders, help companies improve corporate governance and, in doing so, protect shareholder value. In this respect, SIAS has begun discussions with S i2i, which entered the watch-list on 4 March 2015, and will be organising a dialogue session with minority shareholders shortly. Likewise, we invite all companies on the watch-list to also work with us.
In view of the recent SGX announcement to have a minimum trading price of $0.20, we expect that some companies would have difficulty meeting this criteria, and expect the watch-list to grow.
Founder, President & CEO
Securities Investors Association (Singapore)