SIC disregards UOBAM's July acquisition of UOL shares as breach of whitewash condition

UOL Group Limited said that it has alerted the Securities Industry Council of Singapore (SIC) of certain trades on its shares by UOB Asset Management Ltd (UOBAM), which resulted in a breach of condition for an application to SIC for a whitewash waiver.

The application by UOL was to waive Haw Par Corporation's obligation to make a mandatory offer for UOL arising from a share swap agreement in June.

SIC ruled on Aug 21 that the trades by UOBAM may be disregarded "on the basis that the trades were inadvertent and that remedial action has been taken to prevent this from happening again".

"The SIC ruling is subject to UOL making an announcement prior to the extraordinary general meeting to set out details of the trades, the fact that the trades are a breach of the condition, why the breach occurred, the SIC ruling, and the basis for the SIC ruling," UOL said on Wednesday.

Under a share swap agreement with Haw Par in June, UOL agreed to issue 27.3 million new shares to Haw Par in exchange for 60 million UIC shares - a move that will shore up UOL's shareholding interest in UIC from 44.77 per cent to 48.96 per cent.

On May 26, the SIC granted the whitewash waiver for Haw Par to make a mandatory offer for UOL, subject to certain conditions. One of these conditions was that Haw Par and parties acting in concert with it did not acquire or are not to acquire any shares in UOL or instruments convertible into and options in respect of shares in UOL.

But it was brought to UOL's attention on Aug 4, while verifying and finalising the draft circular prior to despatch, that UOBAM acquired 72,000 UOL shares on July 14 or 0.0089 per cent of the total UOL shares in issue.

The acquisition was conducted by a portfolio manager at UOBAM, and comprised 62,000 UOL shares acquired on behalf of certain unit trusts and 10,000 UOL shares acquired on behalf of a third party client.

These trades in question had arisen purely as a result of a communication lapse between UOL and UOB, UOL explained.

A notification by UOL on the restrictions in dealing with UOL shares did not reach the relevant persons in UOB as well as its related corporations and associated corporations. "Unaware of the restrictions, UOBAM carried out the trades," UOL said.

UOBAM has since informed UOL that it has now put in place an embargo on any further dealings in UOL shares until after the end of UOL's extraordinary general meeting to be held on Thursday morning. Shareholders of UOL will vote on whether to waive their rights to receive a mandatory general offer from Haw Par Corp.