Letter to the editor published in Lianhe Zaobao on 9 June 2003
The editor Lianhe Zaobao
We refer to your article "Can EC-Asia's incident be avoided?"
[LHZB 5 June 2003]
Under the disclosure-based regime under the Securities and Futures Act (SFA), it is the responsibility of issuers and their advisers to ensure that prospectuses contain adequate and accurate information for investors.
MAS' review of prospectuses cannot substitute for the issuer's own due diligence. This is because the regulator cannot be privy to all the information that the issuer and its advisers have. However, if a prospectus is discovered to be deficient after it has been registered, MAS can issue a stop order.
Before refusing to register a prospectus or stopping an offer, MAS must be satisfied that material information has been omitted from the prospectus, or that the prospectus contains a false or misleading statement. MAS will consider the circumstances of each case carefully and will verify the information, including with the issuer and its advisers.
In the case of EC-Asia, MAS learned, after the prospectus had been registered, that the company's prospectus did not contain certain material information. After discussions with the company and its advisers, MAS decided that EC-Asia should be given an opportunity to disclose the relevant information to investors, so that they could assess the offer for themselves. It therefore issued an interim stop order. This froze the offer timetable pending the company's response. Had the company disclosed the information in question, MAS intended to lift the interim stop order and allow the IPO to proceed.
But EC-Asia decided on its own accord to withdraw the offer so as to prepare the additional disclosure and relaunch its IPO at a later date. Therefore, the article had no basis to suggest that MAS stopped the business ventures of certain individuals because of their past records.
Vasuki Shastry Director (Communications) External Department Monetary Authority of Singapore