Disclosure needed for personal stock pledges by key shareholders

THE spectacular crash in the shares of property company OKH Global last month raises a pertinent issue regarding disclosure of shares pledged by major shareholders for private loans.

When the stock lost 80 per cent on March 21, investors scrambled to find possible reasons for the selling. Because most of the volume of 247 million shares traded that day came from foreign banks, brokers who bothered to plough through the company's 2015 annual report - available on its website - then speculated that the collapse was possibly through forced selling, as there is a footnote to a shareholding table on page 95 that says that chief executive Bon Ween Foong "is deemed to be interested in the 100,000,000 shares pledged to UBS AG Singapore, 45,000,000 shares pledged to Bank Julius Baer and 30,000,000 shares pledged to Credit Agricole (Suisse) SA, which are registered under his name".

That forced selling involving pledged shares was the reason for the crash was confirmed by a company filing after the market closed that day which said 119.8 million shares pledged by Mr Bon had indeed been forced-sold.