Aug 21, 2015

    Firms targeted by critics must respond soonest, says SGX

    A COMPANY under attack by short-sellers or critics must be sensitive to the severity of the situation as well as provide, as quickly as possible, a full response so that its shareholders can make informed decisions, said Singapore Exchange (SGX) chief regulatory officer Tan Boon Gin.

    Short-sellers, commentators and research firms that issue critical reports on the company should be aware that it is entitled to a right of reply and SGX is willing to allow a halt or suspension pending the preparation of the reply, if necessary, to prevent prices from being distorted by sudden and one-sided criticism, he added.

    "The exchange will also take action if the criticisms contain false or misleading statements," Mr Tan said in an SGX column yesterday.

    "SGX will, at the same time, closely monitor the company's disclosures and trading activities of its shares, and constantly engage with the company. We will take all action necessary to maintain a fair, orderly and transparent market, including working with other regulatory bodies."

    His remarks are seen by investors as timely in the wake of sustained attacks on Noble Group, which has seen its shares slump more than 60 per cent since February, when its accounting methods came under attack by Iceberg Research.

    Market commentators like former Morgan Stanley banker Michael Dee have also criticised Noble for its opaque response to criticisms.

    Noble, however, maintains that it has nothing to hide and vows to improve its transparency and engagement with stakeholders.

    It hired PwC to review how it values some of its commodity assets. PwC's report was disseminated to the public in full when Noble released its second-quarter results on Aug 10.

    Noble held an Investor Day on Monday, which saw senior management meet shareholders and other investors to address their concerns.