SGX RegCo proposes changes to rules for delisting

New rules on delisting companies are on the way to better protect the interests of minority shareholders and level the playing field for all parties.

Singapore Exchange Regulation (SGX RegCo) proposes to disallow offerors and parties acting in concert from voting on voluntary delistings, and to lower the approval threshold from 75 per cent to a simple majority of independent shareholders.

The proposed changes also include scrapping the 10 per cent block provision - which meant a delisting could not proceed if opposed by those holding over 10 per cent of total issued shares.

SGX RegCo chief executive Tan Boon Gin told a briefing that the episode involving Vard Holdings had underscored the "constraints" in existing safeguards.

Vard Holdings' controlling shareholder, Fincantieri Oil & Gas, pushed through the delisting of the shipbuilder as it could vote on the offer despite an outcry from minority investors and opposition over what they deemed was a low-ball offer.

SGX RegCo also plans to require exit offers made in conjunction with a voluntary delisting to be "reasonable and fair" for the deal to proceed, while the independent financial adviser must be of the opinion that the offer meets both criteria.

The listing rules now require an exit offer to be reasonable but do not require it to be fair.

SGX RegCo is seeking public feedback on the changes, and the consultation will close on Dec 7.

A version of this article appeared in the print edition of The Straits Times on November 10, 2018, with the headline 'SGX RegCo proposes changes to rules for delisting'. Print Edition | Subscribe