Best World

[dreamybear]

What does Interested Person Transaction mean?

According to SGX rulebook

http://rulebook.sgx.com/en/display/displ...48&print=1

901

The objective of this Chapter is to guard against the risk that interested persons could influence the issuer, its subsidiaries or associated companies, to enter into transactions with interested persons that may adversely affect the interests of the issuer or its shareholders.

(4)
(a) In the case of a company, "interested person" means:—
(i) a director, chief executive officer, or controlling shareholder of the issuer; or
(ii) an associate of any such director, chief executive officer, or controlling shareholder.

(6) "transaction" includes:—
(a) the provision or receipt of financial assistance;
(b) the acquisition, disposal or leasing of assets;
© the provision or receipt of services;
(d) the issuance or subscription of securities;
(e) the granting of or being granted options; and
(f) the establishment of joint ventures or joint investments;
whether or not in the ordinary course of business, and whether or not entered into directly or indirectly (for example, through one or more interposed entities).

Part III General Requirements

   905

   (1) An issuer must make an immediate announcement of any interested person transaction of a value equal to, or more than, 3% of the group's latest audited net tangible assets.
   (2) If the aggregate value of all transactions entered into with the same interested person during the same financial year amounts to 3% or more of the group's latest audited net tangible assets, the issuer must make an immediate announcement of the latest transaction and all future transactions entered into with that same interested person during that financial year.
   (3) Rule 905(1) and (2) does not apply to any transaction below $100,000.

   906

   (1) An issuer must obtain shareholder approval for any interested person transaction of a value equal to, or more than:—
   (a) 5% of the group's latest audited net tangible assets; or
   (b) 5% of the group's latest audited net tangible assets, when aggregated with other transactions entered into with the same interested person during the same financial year. However, a transaction which has been approved by shareholders, or is the subject of aggregation with another transaction that has been approved by shareholders, need not be included in any subsequent aggregation.
   (2) Rule 906(1) does not apply to any transaction below $100,000.

Part V Exceptions

   915

   The following transactions are not required to comply with Rules 905, 906 and 907:—.

(5) A transaction between an entity at risk and an interested person for the provision of goods or services if:—
(a) the goods or services are sold or rendered based on a fixed or graduated scale, which is publicly quoted; and
(b) the sale prices are applied consistently to all customers or class of customers.
Such transactions include telecommunication and postal services, public utility services, and sale of fixed price goods at retail outlets.

====================================================

From the above, what's your interpretation for Interest Persons Transaction? Does BWL need to declare Koh Kim Chuan as such? Not familiar with this area of disclosure. Can buddies here help explain?

BW has replied to SGX queries.

"The Primary Import Agent is a company incorporated in China owned by Koh Kim Chuan, who is the brother-in-law of Dora Hoan1through his marriage with Mary Huan, Dora Hoan’s sister. Koh Kim Chuan is a self-made businessman who currently owns and manages two companies in Singapore. Dora Hoan has no financial or shareholding interest in the companies owned by Koh Kim Chuan. The Primary Import Agent was incorporated on 10 July 2014 by Yan Weijun2(“Yan”) and his team of executives with seed funding of approximately US$100,000 from Koh Kim Chuan as a personal investment ......................Koh Kim Chuan, who is based in Singapore, was at all times a passive investor in the Primary Import Agent and was not involved in the management or business operations of the Primary Import Agent...............".

More details at : http://bestworld.listedcompany.com/newsr...0JEV.1.pdf

Is this considered confilct of interest under the SGX rules ?

[ACTIVIST SPEAKS]

https://links.sgx.com/FileOpen/2019%2005...eID=558967

Koh Kim Chuan is the brother-in-law of Dora Hoan. If truly independent, why the need to deliberately hide?

Details shifted significantly and facts radically changed in the management's retelling upon SGX's further queries. If unpunished, SGX loses the right to penalize all others in future.

[mslee888]

i am no expert on IPT. To a layman like me, i feel selective disclosure is definitely wrong. If the shortist research reports did not grill to these details, i believe no one will really ever knows...Lets see sgx next course of action.

[brattzz]

BW’s Auditors and Lawyers say ok, means ok, sgxrego can accept their ok? 🤪

[Shiyi]

Shortists are vilified in our market. But they do play a role in making listed companies more transparent, albeit unwillingly.
Without them, we wouldn't have known more about Noble, Olam, Midas, Best World and the like.

SIAS should have done more in this regard.

[weijian]

Shortists are vilified in our market. But they do play a role in making listed companies more transparent, albeit unwillingly.
Without them, we wouldn't have known more about Noble, Olam, Midas, Best World and the like.

SIAS should have done more in this regard.

I can't remember (nor find) any shortist's report (not those brokerage analyst type) on Midas actually. Do you have a record?

In terms of asking SIAS to do more - Well, shortist makes money directly from these positions while SIAS depends on donations/sponsorship. We need to have realistic expectations of SIAS.

https://sias.org.sg/support-sias/ (even 8VIC is a sponsor in last 12months!)

[Shiyi]

Midas was listed in both Spore and HK. Prior to its suspension, the stock in HK was traded at a price a lot higher than in Spore for quite some time. And it is suspected that the shortists had smelt blood.

On SIAS role, I believe it also receives fund from SGX to improve the corporate governance of listed companies. It can do more than providing platform for distressed companies to relieve frustration of the suffering shareholders.

[opmi]

SIAS will pick and choose who they want to 'fight' for....I guess they are also publicity seeking too...shown to be doing things aka wayang

[valueinvestor]

SIAS will pick and choose who they want to 'fight' for....I guess they are also publicity seeking too...shown to be doing things aka wayang

Most of the failed companies are big sponsors of Sias , why would Sias bite the hands that feed them ?

[mobo]

It is not realistic to expect SIAS to function as a fraud detector and/or governance arbitrator - undertaking analysis and investigations like what some of the short oriented professional funds are doing. Leaving matters of principle like conflicts of interests aside, let me raise a few simple numbers to put the whole discussion into perspective.

 
According to its latest published financial report, SIAS had a combined income from various sources amounting to roughly $2.4 million in 2018. Out of this, half of it ($1.2 million) is spent on remuneration for the whole year. This $1.2 million is spent on 15 employees who are currently working in SIAS. The CEO himself is paid approximately $275,000 and excluding him the rest of the 14 staff are essentially sharing a pool of $925,000, meaning on average each SIAS employee is paid a total of $66,000 per year.
 
Remember this $66,000 has to cover monthly salaries, CPF contributions, all sorts of benefits and also bonuses. If you do a simple mathematical calculation out of $66,000, the employer’s CPF contribution would have taken up close to $10,000 leaving only $56,000 for salary, bonus and benefits. Assuming a bare bone benefits package of $1k, that leaves them with only $55,000 for salaries and bonus. If you assume a conservative bonus of 1 month AWS and 1 month variable over 14 months, the average monthly salary of a SIAS staff works out to be $3,900 - roughly the pay of a junior executive in most SMEs. Many banks and asset management firms pay their fresh grads more than that.
 
What is the significance of this you might ask? Well, let me frame from a human perspective – do you think it’s fair to expect a $3.9k  employee to have the business acumen, the deep mastery of accounting, forensic audit and knowledge of the capital markets to pull off something like what Muddy Waters or Bonitas do? If not, what then can one realistically expect a $3.9k salaried employee do? I suppose it would have to be things like organize meetings, facilitate forums, coordinate learning programs and answer PR queries. This is exactly what they have been doing.
 
As they are barely profitable currently, there is no room to build up a proper professional team to do half the things that many investors expect them to do. Now one might argue that the government or SGX should be funding SIAS adequately as a matter of public interest, but until such a time comes, I would implore fellow investors out there to be kinder on grading SIAS. The people working there are neither cut out or compensated for the high standards of what some are expecting and are already doing what is within their financial and talent capability.