SINGAPORE - The Singapore Exchange (SGX) has released a new report highlighting companies that have been stuck in long suspension, as the bourse continues its effort to enhance stock market regulations.
The inaugural half-yearly report showed a list of 20 companies with shares suspended for 12 months or more due to various reasons.
Eleven of the 20 companies are looking to resume their share trading or to launch a reverse takeover, four are in the delisting process, and two are pursuing court action against individuals.
Two others are still pending responses to SGX queries, while one company was placed under judicial management, SGX chief regulatory officer Tan Boon Gin said Thursday (May 12) when launching the report.
Sixteen of the 20 suspended companies are Chinese businesses, including the oldest entry Fibrechem Technologies Limited, which has been suspended since February 2009.
The report aims to increase the transparency on SGX's engagement with these beleaguered firms, whose suspensions have left minority shareholders in the lurch.
SGX listing compliance head June Sim said the shares of the 20 suspended firms combine only to roughly 0.3 per cent of total market cap, but the bourse is doing all it can to protect shareholders' interest.
"We aim for the companies to achieve a trading resumption proposal. Otherwise, our next course of action would be to try to extract an exit offer," Ms Sim said. "Only when we are satisfied that the company has established the lack of financial resource for an exit offer will we allow a delisting without an offer."
The report also marks the latest in a string of recent moves by the SGX to ramp up regulatory oversight on both listing applicants and listed companies.
"Recent improvements we have made at the admission stage include the introduction of the independent Listings Advisory Committee (LAC) and our new 2-stage listings review process," Mr Tan said.
The new review process, implemented late last year, will first require issue managers to consult the SGX on potential issues that may be a deal-breaker. Where issues concerning reputational risks or public interest are involved, these cases will then be escalated to the LAC for review.
The SGX is ready to reject applications by companies with business and governance issues, Mr Tan said, adding that the bourse plans to release in a few months' time another periodic report detailing, on a no-name basis, rejected listing applications.
The requirements for listed companies have also been strengthened. For instance, companies with a primary listing in Singapore must now hold their annual general meetings here, and company boards must have at least two resident directors.
The full package of SGX's regulatory initiatives is to improve risk prevention and law enforcement, Mr Tan noted, referring to SGX's referral of nine cases of insider trading and market manipulation to regulators in the first quarter.
It is unclear whether these cases are linked to the broking house raids by the Monetary Authority of Singapore and Commercial Affairs Department last month.