by Tan Kwong Moh
The troubles of Hyflux have been widely reported in mainstream media. Hyflux may be delisted if it can’t solve its debts, and the thirty over thousands shareholders will be losing their hard-earned money.
So, I would like to share my view and experience on the SGX listed companies which were delisted, sink in huge debts, or facing financial problems in their operating. Here I quoted three examples as below.
Example one, few years ago, China Oldfield was listed on SGX through its IPO at 62 cents a share. Some stock experts also recommended it as a good share, and encouraged investors to buy this counter. Unfortunately, China Oldfield had been delisted less than four years after listing. Many investors lost big money for this listed company. The question is, does SGX scrutinise its financial background before approved its IPO?
Example two, Noble is a Hong Kong based company which listed on SGX. After it incurred huge losses in investments, Noble sought financial help form its shareholders by the way of right issue.But it still couldn’t solve its financial woe. Now, Noble is in liquidation and will be delisted very soon. This is a painful burn for its shareholder who brought its shares.
Courts Asia is another example, it launched its IPO at 66 cents a share just few years ago. Recently, Japanese company Nojima Corporation made an offer to buy Courts Asia at 20.5 cents a share. Let say, if the IPO successful applicant keep the shares till today and accept this offer, he will lose 40 over cents for one share. If the investors don’t accept the offer, and the offeror make a compulsory take over. What are we going to do with this?
Our concern is, to safeguard the interest of the investors, SGX should scrutinise all the IPO and listing applications carefully. Otherwise, if too many listed companies being delisted or suspended. Surely, this will tarnish Singapore reputation as a financial hub. And also may shatter the confidence of local and foreign investors.