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Question
To ask the Senior Minister if his Ministry will institute safeguards or a minimum listing requirement period for foreign companies listed here so as to protect minority shareholders from company owners who seek to de-list their stocks from the Singapore Exchange (SGX) at depressed prices way below their initial listing price.
Note: The above Question was originally directed to the Prime Minister and Minister for Finance (vide Q.*79 in Notice Paper No. 72 of 2005).
Answer
The SGX does not impose a minimum listing period requirement. This is similar to exchanges in other jurisdictions such as Hong Kong and the UK. The issue of whether to voluntarily delist is a commercial decision best left to the company's shareholders. However, SGX has rules to safeguard the interests of minority shareholders in such an event.
2. SGX rules require a shareholders' meeting to be convened to vote on a delisting resolution. To be successful, the resolution has to be (i) approved by a majority of shareholders representing at least 75% in value held by shareholders present and voting; and (ii) not voted against by more than 10% in value held by shareholders present and voting.
3. SGX also requires that (i) a reasonable exit offer, which should normally be in cash, be provided; and (ii) an independent financial adviser be appointed to advise shareholders on the exit offer.
4. Taken together, these rules provide sufficient safeguard against minority shareholders being oppressed or forced to exit at unreasonable prices.
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