Singapore Exchange urged to get tough on foreign listed companies
Here are 5 key proposals from Securities Investors Association to protect retail investors.
A Roundtable Discussion will take place on 2nd August 2012 at Shenton Way to discuss the SIAS proposals to SGX to enhance protection of retail investors investing in Singapore listed foreign companies.
1. The authorities legislate to disallow the resignation of directors, CEO and CFO, except for serious illness, during the life of the Notice of Compliance issued by SGX or any other relevant authority, until the Company complies fully with the requirements of SGX and relevant authorities.
2. SGX seriously consider not listing any company from a foreign country which has no reciprocal or extradition treaty with Singapore. In the event SGX does so, then it must require the company to prominently highlight the absence of both in the prospectus.
3. At the time of listing of a foreign company in Singapore, SGX should require the company to provide a bank guarantee, or a relevant instrument of comfort, of a sufficient quantum to ensure that the company and its directors will fully comply with the Laws, Regulations and the Listing Rules for the period of at least 5 years.
4. A foreign listed company board should not be allowed to transfer monies raised from the Singapore market out of Singapore, unless the board obtains a confirmation in writing signed by the Audit Chairman and the independent directors collectively that the purpose of the transfer is bonafide as disclosed in the prospectus.
5. SIAS proposes that before a foreign issuer is permitted to list on the Singapore Exchange, the SGX should require Board members, as well as the top management persons viz the CEO and CFO, to jointly and severally undertake to SGX, to agree to submit to arbitration in Singapore in respect of the application and adherence of all listing rules and securities laws, and to further agree to compensate all shareholders for any losses which shareholders may suffer as a result of any fraud or mis-management and the quantum shall be decided by the arbitration tribunal. This arbitration agreement should be part of the conditions to list on the Singapore Exchange and the foreign issuer must come from a country which is a party to the New York Convention. This will ensure certainty in enforcement to some extent.