Ensure stricter checks on companies pre-listing

Given the financial debacle surrounding Sino Techfibre, the Singapore Exchange's (SGX) action to delist the company is only right ("Market highlights"; yesterday).

But again, it is the shareholders who lose out. I am afraid many would have lost their investments.

To be fair, the company's auditors were unable to carry out a proper investigation into Sino Techfibre's financial matters after a fire destroyed the company's financial records just before investigations were about to begin ("Fire at Sino Techfibre destroys records"; April 25, 2011).

Sino Techfibre is one of those S-chips (China-based companies) which were listed on the SGX some years back, amid much fanfare.

Many have turned out to be a disappointment ("Investors losing appetite for S-chips"; May 26, 2012).

In the case of Sino Techfibre, shareholders were made to wait for too long to know what action was being taken against the company.

It would enhance SGX's standing if the process were speeded up.

Looking ahead, there should be stricter checks before companies like Sino Techfibre are allowed to list on the board.

Adam Chan Teck Guan

A version of this article appeared in the print edition of The Straits Times on November 03, 2016, with the headline 'Ensure stricter checks on companies pre-listing'. Print Edition | Subscribe