Scandal-hit railway parts maker Midas Holdings has had another slap in the face after an investor watchdog withdrew its "Most Transparent Company" award from the firm yesterday.
The unprecedented move by the Securities Investors Association (Singapore), or Sias, comes in the wake of a damning statement from Midas auditors Mazars LLP.
It stated last month that its reports on Midas for the 2012 to 2016 financial years can no longer be relied upon.
Sias president and chief executive David Gerald said in a statement that this undermines the basis for the award, which Midas won from 2012 to 2016.
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 the 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 disclosed last Friday that investigations into the company had widened to involve 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 added: "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 the winners' list," he added.