I read with much consternation the report on a private investor acquiring Ascott Reit's Ascott Raffles Place Singapore (Private investor buys Ascott Raffles Place for $353m; Jan 10).
The report also indicated that the sale price was 64.3 per cent above the property's latest valuation of $215 million as of Dec 31 last year and, after accounting for transaction-related expenses, Ascott Reit is expected to realise an estimated net gain of $134 million.
I presume that there were valuations conducted and certified by professional valuers as well as audits done by professional accounting firms which were signed off by the company's chief executive and directors, before these were presented and reported to unit holders and other interested parties to reflect a true and fair view of the state of the company.
Yet, it is baffling that in a matter of 10 days, there was a significant increase of 64.3 per cent from the valuation amount.
The investing public can rely on only published financial reports to make their investment decisions.
Besides entrusting the companies' managements and boards of directors to do a good job for them, investors have to also rely on various professional firms including, in this instance, the property valuation company as well as the accounting firm in charge of the audit.
The huge valuation discrepancy in this case is a serious red flag that something is amiss in the process.
As this is a matter relating to a company listed on the Singapore Exchange, I hope the relevant authorities will initiate an investigation into this matter.
Tan Chor Yong