SGX moves to protect minority shareholders

Author: Karry Lai | Published: 4 Nov 2019

The Singapore Exchange (SGX) has made changes to delisting rules to give more power to minority shareholders. The implications are that companies wanting to delist will generally have to pay higher prices than in the past because the offer must be both fair and reasonable, and the offeror cannot vote. The changes will likely to lead to companies having to give shareholders a better exit offer if they elect for a voluntary delisting.

Under the previous regime, an exit offer is only required to be reasonable in the opinion of the independent financial advisor.

"That led to criticism that investor interest, in particular minority shareholders, has not been sufficiently safeguarded, and that the previous delisting rules have resulted in investors receiving low exit offers, notwithstanding that an independent financial advisor had been appointed to opine on the fairness and reasonableness of the offer," said Wai Ming Yap, director at Morgan...