Closer scrutiny of Xpress may be warranted


Published July 28, 2014
LETTER TO THE EDITOR

First published in Business Times, July 25, 2014

ON July 1, SGX issued a query to Xpress Holdings for unusual volume movements in the company’s shares. The number of shares traded that day was 184 million, compared to the usual daily trading volume of a few million shares.

In response to SGX’s queries, the company said it was not aware of any information which had not previously been announced relating to the company, its subsidiaries or associated companies that may explain the unusual trading, or any other possible explanation for the unusual trading. It also confirmed its compliance with the listing rules, particularly rule 703 on the disclosure of material information.

SGX rightly issued a “trade with caution” notice on the company’s shares. On July 4, the company announced that the executive chairman’s deemed interest had decreased by 29 million shares on July 2 due to a disposal of shares.

On the morning of July 22, Xpress Holdings asked for a trading halt. This was followed after midnight by an announcement on the following developments: (a) several creditors have commenced legal proceedings against the company and its subsidiary for sums owing and due amounting to about S$2.4 million; a creditor filed a winding-up petition against the company, and a bank filed a winding-up petition against its subsidiary; (b) the appointment of a financial consultant to assist with formulating a settlement with creditors, and (c) a proposed placement of 480 million new shares.

In light of these developments, regulators should revisit the company’s responses to the SGX’s query on July 1 and determine if the relevant rules have been complied with.

Mak Yuen Teen

 

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