Sakae CFO wrongly bought back shares at price above permissible level
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Sakae's board said it takes the share buyback mandate seriously and will make improvements to prevent such mistakes.
PHOTO: ST FILE
Paige Lim
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SINGAPORE – Mainboard-listed restaurant operator Sakae Holdings has suspended its share buyback after its chief financial officer (CFO) Tan Yiok Ping wrongly bought back the company’s shares at 11.8 cents, above the maximum allowed price of 10.4 cents.
On Oct 27, Mr Tan had queued the purchase of shares at a buyback price of up to 11.8 cents through Sakae’s account with UOB Kay Hian.
However, Sakae said in a bourse filing on Monday that the purchase price of 11.8 cents was a mistake by the CFO, as it exceeded the maximum purchase price approved to be paid for each share under the share buyback mandate.
Under this mandate, the market purchase maximum price should not exceed 105 per cent of the average closing price, which on Oct 27 was 10.4 cents.
Shareholders had previously approved the share buyback mandate at Sakae’s annual general meeting on Oct 29.
By the end of the trading day, Sakae had purchased 500,000 shares at 11.8 cents, which represented 113 per cent of the applicable average closing price. The oversight was realised by Mr Tan only at the end of the trading day, the company said.
Following this, Sakae’s chief executive officer was notified, and both the board and the Singapore Exchange were alerted. “The board immediately directed management and CFO to suspend the buying back of shares pursuant to the share buyback mandate,” the company added.
Shares of Sakae closed at 9.1 cents on Monday, down 2.7 cents or 22.9 per cent, after the announcement.
Sakae noted in its filing that the 500,000 shares purchased are “insignificant”, representing only 0.35 per cent of the total issued and paid-up shares of the company at the relevant time.
It added that the additional consideration of $4,500 paid will not have any material impact on the group’s net tangible assets per share and earnings per share for the current financial year ending June 30, 2023.
“The board states that it takes the share buyback mandate from the shareholders seriously and will make improvements to prevent such mistakes,” Sakae said.
It added that it will not undertake any buyback of its shares until “such improvements are in place”. THE BUSINESS TIMES
