I received a request to help publicise a message to shareholders of Raffles Education Corporation (REC) which has been posted on the Save Raffles Education website. A group of REC shareholders are now coming together to consider legal action against the directors. The message can be accessed here: https://save-raffles-education.com/message-to-shareholders-of-raffles-education-corporation-legal-action/
I have reproduced the message in full below, which includes an email contact: contact@save-raffles-education.com
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On 29 July 2021, after the close of trading, Raffles Education Corporation (REC) announced that the company and its two Malaysian subsidiaries have been served with writs and statements of claims by Affin Bank on 27 May 2021 in the High Court of Malaysia. The writs sought immediate repayment of loans amounting to RM410 million (S$131 million) under facilities entered into by REC’s two subsidiaries. This amount was more than half of REC’s market capitalisation of about S$220 million just before the announcement.
REC’s share price fell by 37.5% by the close of the day following the announcement, and fell to as low as S$0.08 on 2 August 2021, compared to $0.16 the day before the announcement. Today, it is still trading below $0.10.
According to well-known corporate governance advocate Professor Mak Yuen Teen, the late disclosure is a clear breach of the listing rules and the Securities and Futures Act. He believes that investors may have a basis for a civil liability action under the SFA against those responsible for the lack of timely disclosure. Investors who bought shares from 27 May 2021 until before the company’s announcement – and arguably even before that, when multiple letters of demand may well have been issued – may have a particularly strong claim for compensation for losses suffered.
A Group of REC shareholders are now coming together to consider taking legal action against the directors.
If you are a REC shareholder and are interested in joining this action, you can email to the following email address: contact@save-raffles-education.com
Please indicate when you bought the shares if possible, and the number of shares you own.
