by Sunny Tan
This is a counter of the Singapore Stock Exchange and is tightly held by four parties, Temasek, Keppel Corp, Green and another Caucasian.
Le Sheng Jie of SGX emailed to me and said that the board and management of this company are responsible for making sound decisions in the best interest of the company and shareholders.
He is trying to imply that companies enjoy much freedom on how they want to liquidate.
During the AGM and EGM of K1V on 20 October 2017 I asked the question on the process of liquidation of this counter.
The CEO, a Caucasian said that the capital reduction and distribution of profit from Guggenheim will be separate matters and that trading of its shares will be suspended on 25 November 2017.
On 22 November 2017 the assistant general manager of investor relations of Keppel Corp, the mother body of K1V emailed to me to say that the company intend to suspend the trading of its shares on and from the market day immediately following the date on which Guggenheim Disposal is complete for an indefinite period. The suspension was on 17 November 2017.
Let my word be my bond. K1V should keep its word as clearly stated by its CEO to all at its meeting.
Why is it that K1V was in such a great hurry to carry out the suspension exercise.
Ivana gave a lucid answer to this question in her email to me on 22 November 2017.
In her email she said it is to avoid any market speculation on the value of the company.
Then let me cite what the great gurus of share trading say and it is that the only way to make money is to take profit and liquidity is good for the market.
Therefore I am convinced that K1V has a hidden interest in the maintenance of the status quo of its share price.
But, then let us look at a newspaper report that make comments on this topic.
According to Business Times (17 August 2017) K1V’s board intends to distribute $0.3035 for each ordinary share and it is part of its capital reduction exercise.
It will be funded from its existing cash and cash equivalents, in addition to the sale proceeds from the disposal of the company’s entire interest in Guggenheim Capital, the paper reported.
What one see now is the lack of information and contradictory statements and they confuse the retail investors and they cannot make any trade on this counter.
What K1V had done is the creation of a state of confusion and it succeeded in deterring the retail investors and it includes me from trading in this counter.
That is why for the last three weeks up to the date of the suspension there was very little trading on this counter.
This case show that companies that are in the process of being liquidated can manipulate situations to further their own interest but against the interest of the minority shareholders.
To counter such an unfair situation, it is necessary for SGX Regco to be proactive in overseeing the liquidation of companies and thereby ensure that transparency and fairness prevails.
Unless it carries out such a task then the counters of SGX will look upon SGX Regco as a paper tiger and continue to act in ways like those that had liquidated in the past.
T sum up, there is a need for SGX Regco to look into how K1V is liquidating.
I hope it acts now as K1V is racing ahead and at break neck speed to liquidate.