What a revelation! On 13 May 2019, after a probe by SGX RegCo, Best World finally revealed that Koh Kim Chuan, the legal representative and shareholder of Changsha Best, is the brother-in-law of the Group’s CEO and Managing Director. Currently, Best World shares are suspended from trading and hapless investors are once again left high and dry.
In recent years, corporate governance issues had dogged numerous SGX-listed companies like Yuzoo, Noble Group, Midas and the likes. Even blue chips like Keppel Corporation are also not spared (Keppel was fined a whopping $560 million by US authorities in 2018 over corruption scandal). Against this backdrop, I am not surprised if Best World turns out to be yet another falling knife. It seems to be disaster after disaster for SGX-listed companies, to the extent that it is turning out to be a national disgrace. How can Singapore Exchange claim to be “Asian Gateway” when its listed companies keep making headline news for all the wrong reasons?
The meltdown of Best World followed swiftly after the resignation of its non-executive independent director, Chan Soo Sen, on 15 February 2019. To be factual, Best World share price started to spiral out of control on the day of Chan Soo Sen’s resignation announcement.
Best World and Chan Soo Sen
Chan Soo Sen was a former influential politician in Singapore. At one time, he was even a Singapore Minister of State for Trade and Industry. Chan Soo Sen was also non-executive independent director and member of audit committee with Midas since 2006. Incidentally, Chan Soo Sen held the same position as he did in Best World – non-executive independent director and member of audit committee. He joined Best World only in 2016. For the record, Midas was an S-chip company that was razed to the ground following the unearthing of accounting irregularities in 2018. The Midas scandal even forced its external auditor, Mazars, to announce that its reports cannot be relied upon from 2012 to 2016.
The Midas scandal rocked the SGX market because it led to a crisis of confidence among investors and cast a dark shadow on the issue of corporate governance on S-chips and companies whose principle business activities are in China. Many investors must be wondering what sort of regulatory oversights are in placed to safeguard their interests and the enforcement actions that can be taken by our regulators in foreign jurisdictions. Without clarity on these issues, it is not unreasonable for investors to snub S-chips. Of course, Best World is not an S-chip but a Singaporean company that faces troubles lately due to its China’s misadventure. Nonetheless, the rigour of oversight should remain the same, regardless S-chip or not.
Three days after the resignation of Chan Soo Sen, The Business Times [This is a premium article. The rest of the content is blocked and can be accessible by SG Wealth Builder Members only. To read the full content, please sign up as member.]
In a bid to raise financial literacy and reward SG Wealth Builder members, I am pleased to launch the Best SGX stock research campaign. Winner of this contest gets to receive cash prize of $1000!
The rationale for launching this activity is to level the playing field for retail investors, who often lack access to quality SGX stock research, especially homegrown SME stocks. Through this SGX stock research campaign, I hope to raise interest in SGX stocks among local investors, and at the same time, encourage members to share ideas and showcase their analytic skills. The winning entry will be published in this blog for learning purposes.
The winning SGX stock research article must cover a stock that is listed in Singapore Exchange (SGX) and should be engaging and interesting to read. From a story-telling perspective, you can share your best or worst SGX stock investments and what valuable lessons that can be gleaned. Ideally, the article should also contain data to back up the thesis and provides insightful analysis.
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