(17-03-2023, 02:58 PM)header Wrote: [ -> ]Actually in this case, Mr FF Wong himself has not agreed to sell BP shares to BSL. So we as minority shareholders should stay aligned with him and not sell the shares too?
Further, BSL is listed and we can monitor the results of BP through there. So even if BP is not longer listed/ trading suspended, our interest will continue to be some what protected as BSL is listed....
Hi header,
I think there is a difference between a suspended listed company and an unlisted company. We should be careful not to lump both of them together here.
For the former, I am not worried about holding onto it as I am protected by listing rules, although the company is suspended. Listing rules applies to all listed companies,
whether they are traded, halted or suspended. Corporate governance guidelines applies, which means they got to have independent directors on board, report results half yearly etc. Please refer to the Code of Corporate Governance for listed companies for more details.
For the latter, this is the tricky part. As you might know, an unlisted company no longer needs to follow listing rules. Most likely, they also would not be following Code of Corporate Governance for listed companies as well. Holder of shares in an unlisted company will only be protected by Companies Act, which depends on the country of incorporation of the company. Singapore Companies Act apply for BP since it is incorporated in Singapore. Which is to me,
minimum protection. The question is really whether you can trust the controlling shareholder of an unlisted company and continue to invest with them? Your interest is
not protected just because the controlling shareholder is listed. The controlling shareholder have to protect their own interest as well, and their interest should be to buyout subsidaries as cheap as possible if they can to book negative goodwill profits. Their aim is to maximize returns for BSL Group shareholders and not BP shareholders.
For clarification, there is no need to monitor BP results when it is unlisted via listed BSL. As a public company shareholder under the Singapore Companies Act, you will be provided with a set of annual
audited accounts even if the company is unlisted.
I will not comment whether it is worthwhile to hold shares of unlisted companies as it depends on each individual and their risk appetite. What I want to say here is go in with your eyes open, knowing the rules, the protection you have in place and most importantly, whether you can trust the controlling shareholder of an unlisted company. And of course, having a group of shareholders working together and in contact with each other in an unlisted company helps, just in case you want to launch an activist effort together.