18 April, Singapore -- It could have been yet another straightforward takeover deal resulting in a win-win situation for all. However, in a twist of events, shareholders are now uncertain of their investment in Jade Technologies.
The Jade Technologies saga had a significant impact on the investment community as several aggrieved investors struggle to understand how a buyout offer could result in so much confusion. Investors are also trying to understand why the information on the offerer’s pledging of shares was not previously disclosed.
The Jade Technologies case raises questions of confidence and corporate transparency. Markets thrive on information and corporate transparency is the key to the efficient and effective operation of the capital markets. Listed companies are accountable to shareholders and thus should strive to maintain and uphold the investors’ trust through robust governance structures. Good governance is important as it guides directors and management to be aware of the need to demonstrate transparency to all stakeholders.
Timeliness of reporting and the reliability of information are requirements of SGX’s disclosure-based regime.
This case also sends a message to the investing public about the risks of investing (or punting) in speculative counters, in the hope of reaping significant returns. As the saying goes in the age of the modern financial markets - caveat emptor. Investors, or speculators should be aware of the potential risks involved when eyeing the high rewards from short-term trading.
ICPAS, through its Corporate Governance Committee, strongly advocates the importance of transparent corporate reporting and timely disclosures of financial information. The Corporate Disclosures Policy in the Singapore Code of Take-Overs and Mergers “obligates an issuer to provide timely disclosure of material information” and regards disclosures as “fundamentally important to the operation of a fair and efficient market for the trading of securities”. The Code of Corporate Governance also stresses the importance of disclosures of pertinent information that affects shareholders on an “as soon as practicable” basis.
The Institute would like to take the opportunity to stress the importance of maintaining a high level of professionalism when discharging the duties as directors, management and other intermediaries in order to ensure a commitment to highest level of accountability to shareholders. In our opinion, the Jade Technologies case demonstrates the critical importance of timely and quality disclosures of information to the efficient, effective, free and fair operation of capital markets.
About Institute of Certified Public Accountants of Singapore
Established in June 1963, the Institute of Certified Public Accountants of Singapore (ICPAS)is the national accountancy body that develops, supports and enhances the integrity, status and interests of the accountancy profession in Singapore.
The Certified Public Accountant Singapore (CPA Singapore) is a professional in accountancy, finance and business who has the relevant work experience in addition to a recognised accountancy qualification. They are highly versatile and well sought after as business leaders beyond the accountancy, banking and finance industries.
Today, the Institute of Certified Public Accountants of Singapore (ICPAS) has close to 20,000 members and/or CPAs Singapore working and making their mark worldwide, which makes the CPA Singapore a designation with international recognition.
ICPAS’ international outlook and connections are reflected in its membership of
regional and international professional organizations like the ASEAN Federation of Accountants (AFA), the Asia-Oceania Tax Consultants’ Association (AOTCA) and the International Federation of Accountants (IFAC).
The Institute also caters for the training and professional development of its members through regular courses conducted by its training arm, the Singapore Accountancy Academy (SAA).
For more information, please contact:
Ms Catherine Chan
Institute of Certified Public Accountants of Singapore