Categorized | Singapore Trading News

Time to introduce S-Chip investor protection measures: SIAS

The time is now ripe for Singapore to introduce strict measures that will protect the investments of retail investors in S-Chips, according to David Gerald, president and CEO of Securities Investors Association Singapore (SIAS).

Mr Gerald’s comments came as S-Chips investors face another prospect of losing their investments after mainboard-listed China Milk Products Group is found by special auditors KPMG to have several irregularities in its transactions.

In a report dated June 7 by KPMG, China Milk is also found to have made significant payments without board approval and documentation.

SGX said it released the KPMG report after China Milk’s audit committee “did not take prompt action”. The exchange said this is despite a reminder to release the report by 5pm on June 9.

Meanwhile, SIAS said it has made representations to the Singapore Exchange to consider putting safeguards in place, so that money raised from Singapore market is not siphoned off to dodgy deals. It added that its suggestions are being considered by SGX.

On April 5 last year, Singapore Exchange directed China Milk to appoint a Special Auditor immediately to investigate the affairs of the company. The reason for this special course of action was because China Milk failed to release the findings of a cash audit that it was instructed to do earlier last year.

On February 12 last year, China Milk announced that it was in default on its Convertible Bonds as it was unable to meet repayment obligations amounting to US$170 million.

The company had previously said the delay in repayment was due to the process of obtaining approval for the remittance of funds out of China from China’s State Administration of Foreign Exchange (SAFE).

China Milk had then said the process was administrative and procedural in nature.

Adapted from CNA (By Julie Quek)

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