SGX reprimands E3 Holdings and 6 directors

SGX to report violation on listing rules and failures of corporate governance to MAS.

Singapore Exchange (SGX) reprimands E3 Holdings Ltd and six of its directors (one of whom remains on the Board) for breaches of the Listing Rules and failures of corporate governance, according to an SGX report.

Based on the findings of the Report of the Special Auditors, the Exchange is of the view that the Company has breached the following Listing Rules:

• Listing Rules 905 – failure to announce the disposal of the Company’s equity interest in Song Yuan Petrochemical Co Ltd (Song Yuan Petrochem) to an interested person;
• Listing Rule 906 – failure to seek shareholders’ approval for the disposal of the Company’s equity interest in Song Yuan Petrochem to an interested person; and
• Listing Rule 703 - failure to disclose material agreement and accurate information on its investments in China.

Based on the Exchange’s assessment, the following directors (Relevant Directors) failed to comply with Listing Rule 103(5) to act in the interests of shareholders as a whole:

1. Mr Peter Ngo Gim Kang
2. Dr Anthony Soh Guan Cheow
3. Mr Kenneth Ngo Chin Chow
4. Ms Sieh Li Huan
5. Mr Chong Hon Leong
6. Mr Liau Beng Chye

All, except Ms Sieh, are former directors of the Company and its subsidiary, Englo Real Estate Development Pte Ltd (Englo).

The Exchange reprimands the Relevant Directors for not demonstrating the qualities and standards expected of directors and the management of SGX-listed companies, as required under Listing Rules 210(5)(b) and 720.

Based on the findings of the Special Audit Report, the Exchange is also of the view that the Company had failed in corporate governance practices to safeguard the interests of the Company and shareholders. Amongst other things, material agreements and disbursements had been made without Board approval.

The Exchange directs the Board to appoint its sponsor or with the guidance of its sponsor, to appoint an independent professional adviser, to conduct a thorough review of the enlarged group’s systems, procedures, controls and resources with immediate effect. The review is to improve the Company’s governance standards and assure its compliance with the Listing Rules. The review should take into consideration the fact that Company is currently a cash company and proposes to undertake a reverse takeover as announced on 16 July 2009.

Following the independent review, the Board is required to disclose in the Company’s annual report the procedures and corporate governance practices instituted to address the concerns highlighted in the Special Audit.

The Exchange requires the sponsor to state if it is satisfied that the Company has adequate systems, procedures, controls to enable it to proceed with the proposed reverse takeover.

SGX-listed companies are advised to consult the Exchange before they appoint any of the Relevant Directors as a director or member of management.

Listing Rule 703 has statutory backing under section 203 of the Securities and Futures Act. The Exchange will refer this breach to the Monetary Authority of Singapore (MAS).