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Business Times
21-07-2025
- Business
- Business Times
MAS to beef up civil recourse, legal action for investors amid shift to disclosures-based regime
[SINGAPORE] Retail investors who suffer losses in the stock market due to market misconduct could soon find it easier to seek civil recourse. The Monetary Authority of Singapore (MAS) will consult on proposals later this year to strengthen investor protection through the enhancement of avenues to seek civil recourse. MAS on Monday (Jul 21) said it has identified three areas of focus: enabling the pursuit of legal action, facilitating self-organisation, and providing access to funding. To reduce the burden on investors when pursuing civil recourse action, MAS will consider enhancements to existing legal provisions that enable investors to ride on a court action or civil penalty to seek compensation. It will also consult on proposals to allow for representatives to organise and carry out legal action on behalf of investors, such as not-for-profit assistance by the Securities Investors Association Singapore, or Sias. To reduce the risk of potential profiteering behaviour and vexatious litigation, MAS said it will consult on the criteria for such representatives. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up While putting in place appropriate safeguards, MAS said there is a need to address concerns of frivolous legal actions that would unduly burden the market. Lastly, it will seek views on the setting up of a grant scheme to defray the costs of organising investors and taking legal action for cases involving market misconduct. This is aimed at reducing cost barriers that deter investors from seeking compensation through civil action. 'Currently, there have been feedback and observations that retail investors seem to face friction in commencing civil action – such as difficulty in self-organising, and finding sufficient funds for legal advice,' the financial regulatory authority said in a statement. 'Facilitating investors to seek civil recourse is therefore important to bolstering investor confidence, maintaining market integrity and upholding the reputation of Singapore's capital markets,' it added. Disclosure-based shift The announcement comes amid Singapore's proposed shift towards a more disclosure-based regime. The MAS equities market review group in February signalled a move towards a more 'pro-enterprise regulatory stance'. Key changes recommended in its initial set of recommendations included proposals to consolidate listing suitability and prospectus disclosure reviews under Singapore Exchange Regulation; a more targeted approach to post-listing queries, alerts, and trading suspensions; and a removal of the watch list. MAS on Jul 1 also proposed revisions to the product highlights sheet – a document which complements the main offer document and outlines the key features and risks for investors for certain investment products. Along with this, it proposed to streamline the complex products framework – making it easier for retail investors to invest in products that are deemed complex without seeking the now-mandatory financial advice, even where they may not have the relevant qualifications, experience or knowledge in investing. But MAS stressed that safeguards would still be in place for those who need the protection, such as those aged 62 years and above, and those with lower academic qualifications. A MAS spokesperson said that the announcement earlier this month was part of its ongoing review efforts, but 'also in line with the equities market review group's broad objective to improve the vibrancy of our equities market through streamlining regulations and empowering investors in their investment journey'. MAS said the review group continues to review other initiatives to enhance Singapore's equities market. These include measures to uplift companies' shareholder engagement capabilities, strengthen the value proposition and attractiveness of the Catalist board, and enhance market-making mechanisms to promote deeper liquidity and price discovery. To complement the work of the review group, MAS said its corporate governance advisory committee – an industry-led body set up in 2019 – has begun a review of the Code of Corporate Governance.
Business Times
21-07-2025
- Business
- Business Times
MAS to beef up civil recourse, legal action for investors amid shift to disclosure-based regime
[SINGAPORE] Retail investors who suffer losses in the stock market due to market misconduct could soon find it easier to seek civil recourse. The Monetary Authority of Singapore (MAS) will consult on proposals later this year to strengthen investor protection through the enhancement of avenues to seek civil recourse. MAS on Monday (Jul 21) said it has identified three areas of focus: enabling the pursuit of legal action, facilitating self-organisation, and providing access to funding. To reduce the burden on investors when pursuing civil recourse action, MAS will consider enhancements to existing legal provisions that enable investors to ride on a court action or civil penalty to seek compensation. It will also consult on proposals to allow for representatives to organise and carry out legal action on behalf of investors, such as not-for-profit assistance by the Securities Investors Association Singapore, or Sias. To reduce the risk of potential profiteering behaviour and vexatious litigation, MAS said it will consult on the criteria for such representatives. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up While putting in place appropriate safeguards, MAS said there is a need to address concerns of frivolous legal actions that would unduly burden the market. Lastly, it will seek views on the setting up of a grant scheme to defray the costs of organising investors and taking legal action for cases involving market misconduct. This is aimed at reducing cost barriers that deter investors from seeking compensation through civil action. 'Currently, there have been feedback and observations that retail investors seem to face friction in commencing civil action – such as difficulty in self-organising, and finding sufficient funds for legal advice,' the financial regulatory authority said in a statement. 'Facilitating investors to seek civil recourse is therefore important to bolstering investor confidence, maintaining market integrity and upholding the reputation of Singapore's capital markets,' it added. Disclosure-based shift The announcement comes amid Singapore's proposed shift towards a more disclosure-based regime. The MAS equities market review group in February signalled a move towards a more 'pro-enterprise regulatory stance'. Key changes recommended in its initial set of recommendations included proposals to consolidate listing suitability and prospectus disclosure reviews under Singapore Exchange Regulation; a more targeted approach to post-listing queries, alerts, and trading suspensions; and a removal of the watch list. MAS on Jul 1 also proposed revisions to the product highlights sheet – a document which complements the main offer document and outlines the key features and risks for investors for certain investment products. Along with this, it proposed to streamline the complex products framework – making it easier for retail investors to invest in products that are deemed complex without seeking the now-mandatory financial advice, even where they may not have the relevant qualifications, experience or knowledge in investing. But MAS stressed that safeguards would still be in place for those who need the protection, such as those aged 62 years and above, and those with lower academic qualifications. A MAS spokesperson said that the announcement earlier this month was part of its ongoing review efforts, but 'also in line with the equities market review group's broad objective to improve the vibrancy of our equities market through streamlining regulations and empowering investors in their investment journey'. MAS said the review group continues to review other initiatives to enhance Singapore's equities market. These include measures to uplift companies' shareholder engagement capabilities, strengthen the value proposition and attractiveness of the Catalist board, and enhance market-making mechanisms to promote deeper liquidity and price discovery. To complement the work of the review group, MAS said its corporate governance advisory committee – an industry-led body set up in 2019 – has begun a review of the Code of Corporate Governance.
The Star
30-06-2025
- Business
- The Star
Singapore firms seek delay on tougher climate disclosures
SINGAPORE: A group representing thousands of Singapore businesses is seeking a delay to the implementation of more stringent climate-related disclosure rules, arguing many companies lack resources to meet the standards. The Singapore Business Federation, which has more than 32,000 member companies, called for a compliance deadline to be extended by one to two years for small-and-mid-cap firms, which it defines as those with market values of less than S$1 billion (US$784 million). Such companies account for about 84% of current listings on the local exchange, it said. "This doesn't represent a step back from Singapore's climate-reporting ambitions, but is a practical measure,' said Kok Ping Soon, the federation's chief executive officer, in a statement. Smaller companies need "more time to strengthen internal readiness and incorporate best practices,' he said. Singapore Exchange's regulatory arm has called on all publicly traded companies to implement International Sustainability Standards Board-aligned disclosures from the current fiscal year, including data on operational greenhouse gas emissions. The standards are designed to meet demand for more consistent and comparable global disclosures, said Tan Boon Gin, the CEO of Singapore Exchange Regulation, in response to the federation's recommendation. "Ultimately, we want our companies to produce quality reports that are accurate and decision useful,' he said. - Bloomberg
Straits Times
18-06-2025
- Business
- Straits Times
CosmoSteel CEO questions potential takeover of the firm, says offer is undervalued
The opposition from CosmoSteel CEO Ong Tong Hai comes amid more active shareholder efforts to secure better deals in such situations. ST PHOTO: KUA CHEE SIONG SINGAPORE – The chief executive of CosmoSteel Holdings has spoken out against an offer to acquire all the shares of the company, amid more active efforts by shareholders to ensure they secure a fair deal in such situations. Mr Ong Tong Hai, together with his brother Ong Tong Yang and their father Ong Chin Sum, told The Straits Times on May 30 that they are 'deeply concerned' over the 20 cents per share voluntary conditional cash offer by 3HA Capital on May 15. The three are long-term shareholders of CosmoSteel Holdings with a combined 26 per cent stake. The offer is conditional on 3HA Capital holding over 50 per cent of CosmoSteel's issued shares by the closing date of the offer, which will be announced in an offer document to be dispatched no later than June 5. An independent financial adviser (IFA) will be appointed in due course. 'We believe the offer does not represent fair value for shareholders and is made under potentially misleading premises,' the Ongs said in a statement to ST. 'We urge shareholders to carefully consider and evaluate the offer and stand with us in protecting the long-term interests of all shareholders.' The Ongs noted that 3HA Capital had highlighted the risk of CosmoSteel being suspended from trading or delisted for being on the SGX watch list since June 2018 as one of the reasons shareholders may prefer a cash exit. However, the offer price does not account for the proposed abolishing of the watch list by Singapore Exchange Regulation and its confirmation that no listed company would be forced to delist or suspend trading pending the review, they said. The bourse regulator on May 15 said it is consulting the public on scrapping the watch list for loss-making mainboard companies as part of efforts to reduce regulatory friction and encourage price discovery. The Ongs added that 'the offer price grossly undervalues CosmoSteel's recovery trajectory, assets, and growth potential'. While 3HA Capital's offer price of 20 cents is 48.1 per cent higher than CosmoSteel's share price of 13.5 cents on May 14 before the offer was announced, it is still a discount to the company's net asset value per share of 29.3 cents as at March 31. It also does not account for the company turning a profit for the first half of the 2025 financial year, compared with losses in the previous year, the Ongs said. In fact, Mr Ong Tong Hai has been purchasing shares of the steel company in the open market since May 23 at between 21 cents and 22 cents per share, which is higher than 3HA Capital's offer price. The Ongs also noted that the four-party consortium behind 3HA Capital are direct competitors of CosmoSteel. They include Hanwa Singapore, which is a subsidiary of Hanwa Co, a Japan global steel trader which currently holds a 31.6 per cent stake in CosmoSteel. 'Their acquisition of a controlling stake raises serious questions about future strategic direction, potential conflicts of interest, and the independence of the company's operations,' the Ongs said. They warned that accepting 3HA Capital's offer could mean giving up long-term value for short-term liquidity, in a deal structured under incomplete disclosures and involving parties who may not prioritise the interests of minority shareholders. They said in their statement: 'We call upon the board of CosmoSteel to fully evaluate and address these concerns in their formal response to the offer, and to act in the best interests of all shareholders. 'It is important that we do not let short-term fear or misleading representations deny us of long-term value.' The family is speaking out amid a rise in low-priced offers for SGX-listed firms in recent years, some of which cite low liquidity as a justification and put pressure on minority shareholders to accept early under the threat of trading suspension. One example is Boustead Singapore's offer for its subsidiary, Boustead Projects, for 90 cents per share in 2023. After the Securities Investors Association (Singapore), or Sias, called the offer a 'low-ball' one that undervalued the company, it was raised to 95 cents. An IFA nevertheless deemed the offer unfair but reasonable, as the price was below its $1.17 to $1.38 valuation range, but reflected the stock's illiquidity. When Boustead Projects' public float subsequently fell to just 4.5 per cent, which is below the 10 per cent requirement, trading in its shares was suspended. The SGX then directed Boustead Singapore to make a fair and reasonable exit offer for Boustead Projects. A final offer of $1.18 was accepted by over 90 per cent of independent shareholders, and the company was delisted in February 2024. In a November 2023 commentary, Sias president David Gerald had urged minority shareholders not to feel pressured into accepting unfair offers for shares they have likely held for years, adding that the risk of indefinite trading suspension should not be used to justify accepting unreasonable prices. 'The 4.5 per cent who held out have shown that individually they may not be able to make much of a difference, but collectively they can exercise considerable clout,' he said then. Meanwhile, some minority shareholders of Great Eastern (GE) have urged the Securities Industry Council (SIC) to consider amendments to Singapore's takeover and mergers code to promote fair treatment of all shareholders involved in privatisation offers. They include addressing the prolonged suspension of trading in the shares of target companies in a privatisation deal, and imposing stronger obligations on the company's directors to seek better alternatives for minority shareholders when offers are unattractive. GE is expected to announce a final proposal to meet SGX's free float requirements no later than June 8. The company's shares have been suspended from trading since July 2024, after falling below the 10 per cent threshold following a takeover bid by OCBC Bank, its majority shareholder. OCBC has managed to secure 93.52 per cent of GE's shares, short of the 95 per cent needed for a compulsory acquisition and delisting, after some minority shareholders resisted the offer, arguing that OCBC's bid of $25.60 per share undervalues the insurer. Said Mr Ong Chin Woo, who is among those who have resisted: 'Investors, especially retail investors, lack the resources and means to fight for their interests. Hence, they are particularly dependent on the protection of the code to get a fair and reasonable outcome from their investment.' Amid an ongoing consultation by the SIC to amend and strengthen the code, Ms Stefanie Yuen Thio, joint managing partner at TSMP Law, noted that it would be useful to have more avenues for minority shareholders to band together to discuss any offer and, if they think fit, to reject the offer. 'Right now, it's almost impossible for shareholders to do that – they have no means to contact other shareholders and it's for bodies like Sias to convene a meeting,' she said, adding that she has been calling for the law to be changed to facilitate shareholder activism and self-help. Join ST's Telegram channel and get the latest breaking news delivered to you.
Straits Times
04-06-2025
- Business
- Straits Times
Shareholders of Singapore Paincare Holdings should wait for report: Sias
Singapore Paincare will be delisted from the Singapore Exchange's Catalist board if the deal is successful. PHOTO: ST FILE SINGAPORE - Minority shareholders of Singapore Paincare Holdings, which has received a privatisation offer, should wait for a report to be released by an appointed independent financial adviser before selling their shares on the open market , said the Securities Investors Association (Singapore), or Sias, on June 4. Shareholders who do sell on the open market will not have recourse if the privatisation offer price is subsequently revised upwards, Sias added. It also reminded shareholders that 'for a delisting to take place, the IFA has to conclude that the offer is both fair and reasonable'. Singapore Paincare, a local medical services company, has received a privatisation offer from Advance Bridge Healthcare at 16 cents a share, valuing the company at about $27 million. This was announced after the firm requested a trading halt on May 27. The offer represents a 27 per cent premium over its last traded price and 77.8 per cent above its share price in March 2024, when a potential deal was first announced. Singapore Paincare will be delisted from the Singapore Exchange's Catalist board if the deal is successful. According to guidelines by Singapore Exchange Regulation, an offer is 'fair' if the value of the offer price is greater than or equal to the value of the securities subject to the offer. Securities are tradeable financial assets such as shares in a company. How 'reasonable' an offer is depends on factors such as the concentration of pre-existing voting power in the securities of the issuer, the market liquidity of those securities and the likelihood of an alternative offer being made. Sias noted that Singapore Paincare was listed at 22 cents per share in July 2020 during Covid-19 when valuations were depressed and when the Straits Times Index (STI) was trading at around 2,500. Sias added that the company now wishes to delist at 16 cents per share when the STI is trading at around 3,900. The company's initial public offering (IPO) price of 22 cents was also a 123 per cent premium on the group's unaudited net asset value per share of about 9.86 cents on Dec 31, Sias noted. It added that the price offered under the scheme of arrangement is at a slight discount to the company's audited net asset value per share of 16.6 cents as at June 30, 2024, while the unaudited net asset value stands at 16.3 cents per share as at Dec 31, 2024. 'If the same IPO premium was to be applied now, the privatisation price should be around 36 cents to 37 cents,' Sias said, noting that 'well-managed healthcare companies generally trade at premiums to their net asset value'. It added that the deal is conducted through a scheme of arrangement, which means the approval of the scheme has to be approved by more than 50 per cent of those present and voting at the scheme meeting, and by more than 75 per cent in value of the shares held by shareholders voting. 'Sias would like to remind all offerors to treat shareholders fairly... As such, they should therefore make offers that are fair and reasonable when subsequently delisting,' it said. Sue-Ann Tan is a business correspondent at The Straits Times covering capital markets and sustainable finance. Join ST's Telegram channel and get the latest breaking news delivered to you.
