Best World share trading resumes but is halted later

Stock falls 16% as SGX suspends trade to probe firm's China sales figure; founders sue Bonitas for defamation

Best World shares dived when trading resumed after a two-week halt yesterday - only for another suspension to be imposed at 3.14pm.

The shares ended at $1.36, down 26 cents or 16 per cent, on volume of 28.8 million.

The halt was so the Singapore Exchange (SGX) could investigate "the veracity of the company's China sales".

Before the market opened yesterday, Best World announced that the company and founders Dora Hoan and Doreen Tan had started defamation proceedings in the Singapore High Court on May 3 against Bonitas Research and its founder.

The move was in response to a Bonitas report last month that questioned the authenticity and legality of the skincare firm's profits.

Best World said in a regulatory filing at 1.42am that the report contained false and defamatory allegations "intended to undermine the reputations" of the group and its senior management, cause a loss of confidence in the group and inflict damage on the company's shares to "financially benefit Bonitas".

It said Bonitas is a professional short seller that had stated in the report that it would profit from the decline in Best World's share price.

Best World said: "The company strongly urges its shareholders and potential investors not to be deceived by the report, which has undermined confidence in the group and destroyed the value that the company has created for its shareholders over the years."

Bonitas founder and chief executive Matthew Wiechert said yesterday that the firm has yet to be contacted by anyone from Best World.

Best World said its lawyers are preparing to serve court papers on the potential defendants, who are not resident in Singapore.

Mr Wiechert said his company is "ready with an exhaustive list of internal discovery document requests" which it believes would corroborate publicly available findings.

He noted that Best World's response failed to address the key issues raised in the Bonitas report.

Best World's filing also included a point-by-point rebuttal of several issues in the report. These include claims about the scope of its independent review by PricewaterhouseCoopers Consulting (Singapore) and the nature of a portion of its sales for the 2017 financial year.

Another claim - that Best World was allegedly conducting direct selling in China - was also denied. But it said it would seek a separate legal opinion on whether its distribution model constitutes direct selling under the applicable regulations.

Best World also refuted a Bonitas' claim that Changsha Best, one of its key customers, was not an independent party.

This claim was underlined yesterday by an anonymous group called Valiant Varriors, which drew links between company founder Hoan and Mr Koh Kim Chuan, which it said is her brother-in-law and legal owner of Changsha Best. Best World said it is examining the claims.

The company had intended to lift the trading halt it called on April 24 on May 6 but delayed it to yesterday, after the release of its quarterly results.

Best World posted a 79 per cent jump in first-quarter net profit to $10.3 million, it announced on Wednesday. It pointed to strong sales growth across most of its markets, particularly China.

In April, SGX's regulatory arm ordered a review of Best World's China business to address all matters raised by the Bonitas report. Separately, it also granted a two-month extension until June 30 for the firm to convene its annual general meeting.

A version of this article appeared in the print edition of The Straits Times on May 10, 2019, with the headline 'Best World share trading resumes but is halted later'. Print Edition | Subscribe