I have been holding on to the shares of Vard Holding for a while. This company used to be called STX OSV before Fincantieri bought a major stake in it and renamed it to Vard Holding. Vard is in the business of ship building and it has not been making money in the last few years. Despite this, investors like myself still believe in the company and we continue to hold on to this belief even now.
Since 2013, Fincantieri has attempted several times to delist the company but in vain. It attempted again last month. This time, some of the actions that they have taken are quite questionable and this has prompted some shareholders to raise concern to SGX. For example, there is some concern regarding the independence of an individual in providing independent advice on the exit offer. Some minority shareholders also received their circular on the exit offer late.
Last Monday afternoon, I have attended the EGM to give my little support so that we are able to get that 10% vote to stop the delisting. Despite this, most of the minority shareholders like myself know that the chance of this happening is very low because of reasons beyond our control. Fincantieri has already gotten 83% of the total outstanding shares and I believe most of the remaining shares lie in the CPF or SRS nominee accounts. The general feeling is that the offer is not fair but there is little we can do about it. To cut the story short, the delisting proposal was approved eventually because we did not have enough minority sharesholders to get the 10% that we needed.
I do not blame Fincantieri for whatever they have to do to get what they want. What I do not understand is the position that SGX has chosen to take in this saga. For the concerns raised by the minority sharesholders, SGX has simply taken the replies from the company as good. I am not sure whether this is right but I would not blame anybody if he feels that his interest has not been looked after by the exchange.
Judging by the declining retail trading volume, I believe a lot of the retail investors are moving out of Singapore market because of reasons such as the lack of confidence with the exchange in looking after their interest. When there is no retail participation, companies will not be attracted to list their shares in this exchange. Those that are listed may even choose to delist. With fewer
company listing, retail participation will drop even further. As you can see, this has gone into a downward spiral effect. SGX will need to do more if Singapore wants to be a global financial hub. First and foremost, they will need to restore the confidence of the minority shareholders.
Anyway, serious disappointment!!!
Update on 11th May
SGX has finally spoken. This is one rare occasion that SGX has chosen to stand on the side of the minority investors. It was reported in the news that SGX has ordered Vard to hold new EGM. Is this a good news? I am not sure. But, it has clearly stated that some of the numbers in the delisting circular were erroneous and this inaccuracy may have resulted in wrong decision on the part of minority investors. Anyway, we shall see.
Update on 27th July
Sigh!! The new EGM took place on 24th July but the result was still the same. What do we expect? Minority shareholders are always at the losing end especially when we are talking about SGX. Anyway, if you are a minority shareholder, my advice is to be very careful when buying stocks in this exchange. Unless a proper governance is put in place to protect the interests of the minority shareholders, the confidence of retail investors will continue to be low.
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