Citing unhappiness among minority investors, SIAS seeks clarification from OCBC on Great Eastern offer

SINGAPORE: Citing “disappointment” among minority shareholders of Substantial Eastern, the Securities Merchants Association Singapore (SIAS) has posed inquiries to OCBC referring to the monetary institution’s privatisation portray for its insurance arm.

Describing the supply as having created a “jam” for Substantial Eastern’s smaller investors, the retail investor watchdog on Friday (Jun 21) urged corporations that intend to delist in future to “provide a proposal tag which is that if reality be told ‘comely and cheap’ to all shareholders”.

A RECAP OF OCBC’S BID FOR GREAT EASTERN

OCBC, Singapore’s 2d-largest lender, on Can also 10 announced a S$1.4 billion (US$1.03 billion) supply to purchase the 11.56 per cent stake in Substantial Eastern that it does no longer absorb, to be able to delist the insurer.

The monetary institution made a proposal tag of S$25.60 per piece, which it acknowledged represents a top rate of 36.9 per cent over Substantial Eastern’s closing traded tag of S$18.70.

Final week, Ernst & Young – the fair monetary adviser appointed to the deal – described the terms of OCBC’s supply as “no longer comely nonetheless cheap”. Then again, it told Substantial Eastern’s fair directors to point out that minority shareholders acquire the supply.

Following that, OCBC acknowledged in a separate commentary that its supply tag used to be “ultimate” and prolonged the closing date of its supply to Jul 12.

The monetary institution’s commentary “left out any reference” to the fair monetary adviser’s thought, acknowledged SIAS founder-CEO David Gerald on Friday.

He added that the retail investor watchdog has since purchased “hundreds of inquiries” from shareholders of Substantial Eastern “wanting for clarity and transparency” from OCBC.

Plenty of long-term shareholders absorb furthermore beforehand told SIAS, as properly as within the public through media interviews, that “they would possibly furthermore no longer acquire (OCBC’s) supply because they feel that (Substantial Eastern) has been trading below the upright value for the longest time”, acknowledged Mr Gerald.

A group of about 125 minority shareholders, led by ancient remisier Ong Chin Woo, told CNA closing week that they are “upset” with OCBC’s resolution to no longer disappear on its supply tag.

As such, Mr Gerald from SIAS hopes that OCBC’s board can “respond adequately” to the troubles of these minority shareholders.

Questions integrated in a letter addressed to OCBC’s chairman Andrew Lee and participants of the monetary institution’s board on Friday consist of if the monetary institution had idea referring to the fair monetary adviser’s thought when it made up our minds no longer to raise its supply tag.

Mr Gerald furthermore asked for the predominant factors that led OCBC to its supply tag, how the monetary institution justifies what is perceived as an “unfair” supply and if the monetary institution has purchased suggestions from its absorb shareholders concerning the aptitude reputational dangers arising from this deal.