TWO former senior employees of UOB Kay Hian Private Limited (UOBKH) were charged on Wednesday for allegedly lying to the Monetary Authority of Singapore (MAS) in relation to reports on a then Catalist aspirant. Lan Kang Ming, 38, and Wee Toon Lee, 34, each face three charges of providing MAS with false information in October 2018 in relation to due diligence reports on an unidentified company applying to list on the Catalist board of the Singapore Exchange. MAS said in a media statement on Wednesday that it was performing an onsite inspection of UOBKH between June and August 2018, to assess the latter's controls, policies and procedures in relation to its role as an issue manager for Initial Public Offering (IPOs). During the examination, Lan and Wee were said to have provided different versions of a due diligence report relating to background checks on a company applying to be listed on the Catalist board of the Singapore Exchange. UOBKH had acted as the issue manager
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Yes, says founder David Gerald; It continues to be the voice, educator and protector of small investors
Michelle Quah
03 October 2014
Fifteen years ago, a minority-investor rights group called the Securities Investors Association of Singapore (Sias) was born out of the cross-border debacle known as the Clob saga.
A year earlier, Malaysia had declared that trading of Malaysian shares on Singapore’s Clob International was illegal. The episode is now water under the bridge. Capital markets too, have changed much in shape and tone, especially in recent years.
Is Sias therefore still relevant?
The short answer is “yes”, if one asks Sias founder and chief David Gerald, who has more or less single-handedly steered and developed the association in the last decade and a half. He believes it continues to play a crucial role, even as he is paving the way for a successor to take over in a few years.
The 70-year-old told The Business Times in a recent interview: “Sias has established itself as the voice, an educator and a protector of the small investor.”
He added that Sias also monitors the corporate-governance practices of companies, and where there is a shortfall in standards, it sets up meetings with these companies.
He said, however, that the help coming to retail investors from the establishment is “rather tongue in cheek”, pointing out that the Singapore Exchange (SGX) recently announced a reduction in standard board lot sizes of securities listed on the exchange from 1,000 to 100 units, but was silent on whether the same fees were payable.
“Why are we not working on adjusting the fees to make it more attractive?” he asked.
“Our market is still a very small market, and liquidity is still low. Many (Singaporeans) are still losing money, many are still afraid to invest.
“So Sias continues to play a crucial role, because minority investors still need that voice and the protection.”
Mr Gerald said that since its inception in 1999, Sias has run 940 investor-education programmes and covered 125,000 Singapore citizens.
“We teach Singaporeans how to manage risk, how to determine their own risk profile, how to manage risk in investing.”
Sias also continues to be the much-needed voice and guide for retail investors whose investments have turned out less than satisfactory. “While most listed companies are run by honest people, you do have some who are up to no good,” he said, citing the case of the land-banking firm Profitable Plots. Two former directors were jailed this year for conspiring to cheat investors.
He said: “We liaised with the investors, providing them with guidance and legal advice; we also liaised with the Commercial Affairs Department to ensure that justice was done.”
Sias is doing something right, for delegations from the European Parliament’s Committee on Economic and Monetary Affairs and Kazakhstan to come here to find out how they can set up similar investors’ associations back home.
Mr Gerald said Sias has carved out for itself a unique role - that of maintaining “investor-relations peace”; this, it does by working in tripartite fashion, namely, with investors, company boards and regulators.
“I think we have reached a stage where the regulators and the boards give due recognition to Sias. For example, in the case of China Sky (Chemical Fibre Co Ltd), I was allowed to mediate between SGX and the majority shareholders (of China Sky). That clearly shows how our role is seen in the marketplace.”
Investors and observers are aware of the mediating role Sia has played in disputes; many remember what it did in the cases involving NatSteel, China Aviation Oil, Isetan, Yellow Pages and, more recently, between Olam International and Muddy Waters.
But Mr Gerald has his critics, who say he thrusts himself into these high-profile disputes just to make a name for himself.
In his own defence, the Sias chief said: “We’re an association that is not interested in headlines.
Advocacy will remain Sias’ main focus in the coming years, he said, adding that he is hoping it can do more research, for example, into how investors feel about the market, regulatory requirements, investing, and companies’ conduct.
Funding remains a key challenge. He said the group can do much more if it has a strong, independent source of funding, like Malaysia’s Capital Markets Development Fund.
Sias now raises funds from programmes such as its annual Investors’ Choice Awards, Corporate Governance Week and Investment Week; it also gets funding from corporates, which some have said hurts the association’s credibility.
To this criticism, Mr Gerald said: “Yes, I agree that it does give the perception that we may be beholden. But I have demonstrated quite clearly, through the case of one sponsor, that if you interfere with our independence, no matter how large your support is, we will say goodbye.”
That sponsor was DBS, on which Sias publicly put pressure in 2005. Sias charged that the bank indirectly caused a share overhang in Longcheer Holdings, which it had listed, and pushed for DBS to compensate shareholders. This had led to DBS pulling its $50,000-a-year sponsorship of Sias.
For now, to aid its fundraising efforts, Sias has applied to become a charity, and then, an Institution of Public Character (IPC), which would give its supporters tax deductions on their donations.
Mr Gerald quipped: “This way, at least the next president (of Sias) won’t have to sweat it out, and he won’t have to be an Oliver Twist saying, ‘Please, sir, may I have some more?”