Back in December 2014, Swiber Holdings announced that it had broken into the West African market by securing a US$710 million (S$989 million) project from a Houston-based oil and gas company.
Yesterday, the Singapore Exchange reprimanded Swiber - now under judicial management - over that announcement, saying it had breached listing rules by failing to be "fair and balanced".
At the heart of the issue is the fact that when Swiber made the announcement, it had not yet signed a contract for the deal. Yet, the SGX said, Swiber included the value of the deal in its total order book, amounting to US$1.03 billion at the time.
Swiber then gave no updates on the West African works until July 8 this year, when it told the market that the project had not been able to progress in accordance with its original schedule due to persistent weakness in the oil and gas sector.
Swiber added that the firm and its subsidiaries had not recognised any revenue from the project.
The SGX then issued queries to Swiber, which provided a copy of the Letter of Intent (LOI) signed between its unit, Swiber Offshore Construction (SOC), and the client. The LOI stated, among other things, that a contract document would be formalised in due course and that the contract price of US$710 million was an indicative one which would be reviewed at a later stage.
So, the SGX said, the original December 2014 announcement was not balanced and fair, "as Swiber presented favourable possibilities as certain, or as more probable than is actually the case". In particular, it noted, Swiber did not disclose that based on the LOI, the project was subjected to the formalisation of a contract in due course between SOC and the client, and the determination of the final contract price.
"SGX is of the view that the announcement failed to provide investors, including shareholders and bondholders, with sufficient information to enable them to have a proper understanding of the impact of a major project award on the group," the bourse operator said.
The SGX said it has referred the case to the relevant authorities.
Swiber itself became the victim of the prolonged slump in the oil and gas industry earlier this year. It applied in July to place itself under judicial management, after initially filing for liquidation.
