Best World

https://links.sgx.com/FileOpen/Responses...eID=774160

While management has published an SGX announcement to show it has been not non shareholder friendly, I find the report insufficient.

One pointer which I found grossly inadequate in its rebuttal is this:

"In 2019, the Board on the recommendation of the Remuneration Committee (“RC”), engaged Korn Ferry (“KF”), a global organizational consulting firm, to provide independent advice to the RC on the components structure in relation to the remuneration for the EDs. KF’s report was duly disclosed in the Company’s public response to the queries of the Securities Investors Association (Singapore) on the Company’s annual report for FY2021 on 24 July 2022. KF reviewed and
validated the aggregate quantum and compensation structure of the EDs against 22 comparable listed companies in Singapore where the controlling shareholders are similarly in management as in the case of Best World. The Board is satisfied that the level and structure of the EDs’ annual remuneration, as approved, are appropriate and commensurate with their value add to the Group.

The RC has been proactively reviewing the EDs’ remuneration and has asked for a market benchmarking exercise to be conducted on a fairly regular basis. In June 2023, the RC and the Board engaged HRGuru for another market benchmarking exercise which was completed in August 2023, and is slated to be announced in the upcoming FY2023 Annual Report."

My response: As said among the SGX listed companies, Best World Co chairwomen hold the title of the No 3 and No 4 best paid executives. I shudder to think how they had benchmarked the 22 listed comparables in Singapore. With the mgmt pay equating to more than 10% of the company net profits, I will like to ask what were the comparables Korn Ferry used.

On a side note, the minority shareholders are mounting another challenge in a telegram group. I understand Dreamybear has knowledge of it and any shareholders who are disgruntled with the mgmt poor treatment of minority interest (my own words); feel free to approach him.

Wow! This company now has cash (608mil sgd) that is more than its total equity, or 80% of its market capitalization. Its end FY23 balance sheet also shows that it was negative working capital (inventories + receivables - payables) = 63 + 10 - 138 = -65mil. So there is a high probability that the more it scales, the more negative working capital!

Since it isn't paying out any of its cash as dividends, It must be loading its elephant gun for a takeover target in the near future. Its competitor, Nu Skin has a current market capitalization of ~600mil USD. How about a change from competitor to sister?

21. Dividend
In view of the Group's short and medium term commitment which include but are not limited to, working capital requirements and corporate actions capital needs, as well as taking into consideration the uncertain business climate explained further in Section 4 of Other Information, no dividends have been declared/recommended by the Board for the financial year ended 31 December 2023

BW FY23 results:
https://links.sgx.com/FileOpen/2024%2002...eID=790028

Agreed that "The more it scale, the more negative capital!"

It's rather unfortunate that no dividend is given this round too.

Not vested but eyeing like a hawk 

Gratitude.


Enjoy:

I am surprised that investors are still viewing this company favorably, waiting to enter and speculating an acquisition etc.

I was once an investor in this counter but the short sell debacle in 2019 had changed the management completely. It would appear they have totally disregarded the image of being shareholder friendly after having their image ripped up by the short sellers.

In 2018
- Top 3 paid individuals are paid between $12,000,000 to $12,750,000
- Interested person transactions total at $134,000 paid to brother of Dora

Now
- management has gone through multiple EAOs and withheld dividends in the meantime
- In FY 2022, Top 3 paid individuals are paid between $32,500,000 to $33,250,000 in FY2022
- In FY2023, Interested person transactions total at $1,637,000 paid to children of Doreen, sister of Doreen, brother of Dora, spouse of Huang Ban Chin and live in partner of Dora

I wonder what was the freelance and marketing work done by the related personnels that was so valuable that it commands a total of $1.6m of payments.

And all this while pausing dividends in FY2021, FY2022 and now FY2023.

I don't really think there is much recourse for minority investors, and at the same time, I am not interested in standing in line after the management and their family in waiting for cashflow returns to come to me. Not even sure any benefits will ever come to a shareholder at all. And as valuations are concerned, it's a discounted cashflow. And with no cashflow in sight for minority holders, the value is zero to me. The only floor price I can think of is the privatisation offer the management might come up if enough shareholders lose patience and drive the price down.

This is pretty disappointing. I used to hold them in really high regards in terms of shareholder friendliness. Doesn't feel like it anymore. Am I too pessimistic?

Not vested.

bwl@177
Halted

Gratitude!


Enjoy:

Seems like some big investors in the company has banded together to requisite an EGM to address both the pay of the EDs that have skyrocketed and to implement a dividend policy.

Best World management does what they do best… and decides to offer a delisting. Wow?

What would constitute a fair offer with an IFA? Which agencies would be able to protect the interests of minority shareholders? SIAS has proven to be totally useless in Auric Pacific’s take private offer when I held it as a shareholder so I am having ZERO expectations of them making any contributions to protecting minority shareholders.

If SGX wants to promote investments on their exchange, it’s high time they did more on corporate governance. What Japan did seem to have helped revive an otherwise lifeless exchange.

This is really getting atrocious. The outcome will go a long way in determining the investment landscape in SG.

Simplest way is to name and shame the 2 chairwomen and this company. However do note these 2 chairwomen have strong political connections and perhaps may be making occasional political donations.

Piecing the jigsaws will tell you the end outcome

(22-03-2024, 11:00 PM)Squirrel Wrote: What would constitute a fair offer with an IFA? Which agencies would be able to protect the interests of minority shareholders? 

Hi Squirrel,

Even if the IFA opinion for the exit offer is fair and reasonable, for selective capital reduction, it will not be carried if shareholders voted against it. And it requires 75% for approval and those not participating in the SCR (i.e. major shareholders of the company) cannot vote.

I think minorities should come out in force to vote against the SCR, if they are unhappy with the price offered. 75% is a pretty high benchmark for it to go through, especially as the controlling shareholders cannot vote. I don't think minorities need any extra protection in this case.

(23-03-2024, 12:16 AM)ghchua Wrote:

(22-03-2024, 11:00 PM)Squirrel Wrote: What would constitute a fair offer with an IFA? Which agencies would be able to protect the interests of minority shareholders? 

Hi Squirrel,

Even if the IFA opinion for the exit offer is fair and reasonable, for selective capital reduction, it will not be carried if shareholders voted against it. And it requires 75% for approval and those not participating in the SCR (i.e. major shareholders of the company) cannot vote.

I think minorities should come out in force to vote against the SCR, if they are unhappy with the price offered. 75% is a pretty high benchmark for it to go through, especially as the controlling shareholders cannot vote. I don't think minorities need any extra protection in this case.

No details are given on the exit offer price. Nor are the identity of the requisitioning members. So much for the corporate governance and transparency.

Based on the announcement, the Board has carefully considered available exit strategies.
https://links.sgx.com/FileOpen/2024%2003...eID=792902

If the selective capital reduction delisting exercise requires conditions such as 75% approval of eligible, offer to be fair and reasonable, etc, is it easier/more likely to go thru' as compared to using Voluntary Cash Offer(VO) route ?

Why not VO or other strategies ?

-----------------------

Resolution 2 seems interesting - Generally, are minority shareholders entitled to ask for such reports in AGMs ?
https://links.sgx.com/FileOpen/2024%2003...eID=792903

Prof Mak actually did point out an interesting remuneration issue - two versions on the appointment of independent consultant ? Admin error ? If there is indeed consultant appt, shd the AR2019 be updated or what is the way to handle this ? Has something like updating of previous version of AR been done before in SGX listed companies ?

https://governanceforstakeholders.com/20...reholders/ (emphasis added)
"The company also said that in 2019, the Board on the recommendation of RC, engaged Korn Ferry (KF), to provide independent advice to the RC on the components structure in relation to the remuneration for the EDs. It said that KF’s report was duly disclosed in the Company’s public response to the queries of the Securities Investors Association (Singapore) on the Company’s annual report for FY2021 on 24 July 2022. However, in the company’s FY2019 annual report, it had said that no independent remuneration consultant was appointed that year"

As for the resolutions on the IDs, not sure how this works in conjunction with the resumption proposal.
https://links.sgx.com/FileOpen/2022%2010...eID=733566
"Any changes in the Board of Directors appointment to be subject to SGX RegCo’s prior approval for the next 3 years; "