SINGAPORE - The Securities Investors Association (Singapore) or SIAS has withdrawn its "Most Transparent Company Award" from scandal-hit railway parts maker Midas Holdings.
This comes after Mazars LLP, the auditors for Midas, publicly disclosed that their reports on Midas for 2012 to 2016 can no longer be relied upon, thus undermining the basis for the awards, SIAS president and chief executive David Gerald said in a statement.
Trading in Midas shares has been suspended since Feb 9, after several cases of litigation, enforcement orders and court documents involving various subsidiaries and associate companies based in China were uncovered.
The company said then that sums of money and shares in subsidiaries had been frozen by Chinese courts. Last week, Midas announced it had defaulted on US$1.05 million (S$1.4 million) in interest payment on medium term notes.
The Singapore Exchange on Friday (May 25) disclosed that investigations into the railway-parts maker has widened to include the authorities in China and Hong Kong.
Mr Gerald said SIAS and its industry partners rely on audited financial statements and other relevant information in companies' annual reports.
"There was no clue of any wrongdoings by Midas at the time the awards were presented. After all, Midas was a favourite with local equity analysts with broking firms," he noted.
"What must be understood clearly by everyone is that there is no guarantee that a company or a person exhibiting good conduct today may continue to do so in the future. It is also not humanly possible for SIAS or anyone to predict the future perfectly."
Noting that this is an "unprecedented" move, Mr Gerald said SIAS and the selection committee "have always taken precautions to screen and check companies before they are awarded".
"Nevertheless, SIAS takes a serious view of misrepresentations, fraud and breaches in the laws and companies that have not adhered to the spirit of good corporate governance and transparency will have to be removed from winners' list," he added.