SGX raps Aspen over misleading statements on purported glove deal

The Singapore Exchange's (SGX) listings disciplinary committee has reprimanded property developer Aspen (Group) Holdings for false and misleading statements it made about a purported deal to supply gloves to multinational conglomerate Honeywell International.

In a regulatory statement last Friday, the committee also reprimanded Aspen's chief executive and executive director Murly Manokharan and two other executive directors: executive deputy chairman Nazir Ariff and group managing director Ir Anilarasu Amaranazan.

Mr Murly has to agree not to take any position in any other SGX-listed company for six months from July 20 this year. He also has to undergo a training programme on listing rule obligations. The two other executive directors will also have to undergo such a programme.

Aspen, parent of glove manufacturer Aspen Glove, had on April 13 last year announced a US$210 million (S$294 million) two-year master supply agreement (MSA) with Honeywell.

But this statement turned out to be false. At the time it was made, the company did not have any executed copy of the agreement or confirmation that it had been officially executed.

News of the agreement was picked up by media outlets, including The Straits Times and The Business Times.

Honeywell subsequently contacted Aspen to stop circulating the announcement and asked that the company retract press statements it had issued.

Instead of issuing a retraction on the SGXNet portal immediately, Aspen made attempts to ask media outlets to take down their articles about the announcement.

According to a statement by the committee, Aspen believed that "once it removed the press releases in the media, it would then have clarity as to whether an agreement between Aspen and Honeywell would eventually be signed, and thus be able to make an appropriate announcement at that stage".

It was not until April 24 the same year that the announcement was retracted.

Honeywell indicated on May 8 that it would not proceed with the MSA with Aspen.

While Aspen indicated that it accepted the decision to terminate negotiations on May 11, it did not inform investors of the development in its business update on May 17. Instead, Aspen said only that it would update shareholders via SGXNet when there were any material developments.

It was only on June 4 last year, after further queries from the SGX, that the company announced to investors that the deal had been called off and that the MSA was not consummated by Honeywell.

Aspen's shares later fell 8.3 per cent between June 4 and 7, to 19 cents. This was 23.3 per cent lower than its share price of 24.5 cents on April 13, when the initial MSA announcement was made.

In the committee's grounds for its decision, it laid out charges against Aspen, Mr Murly, the two executive directors and relevant non-executive directors for not promptly disclosing that the MSA negotiations had been officially terminated, and for failing to have in place adequate and effective systems of internal controls and risk management systems.

An additional charge of failing to promptly disclose the non-consummation of the MSA was laid on Aspen, Mr Murly and the two executive directors.

The company and Mr Murly received a further charge for releasing the MSA announcement, which was non-factual, false and misleading.

Shares of Aspen fell 0.5 cent, or 9.8 per cent, to 4.6 cents last Friday after the regulatory statement was released.

THE BUSINESS TIMES