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Attacked by short sellers? Respond ASAP: SGX
SINGAPORE Exchange (SGX) on Thursday urged companies under attack by short sellers or through highly critical reports to "provide, as much and as quickly as possible, a full response so that shareholders have a complete picture and can make informed decisions".
Companies under attack must "be sensitive to the severity of the situation", Tan Boon Gin, SGX's chief regulatory officer, said in the exchange's Regulator's Column.
"A few listed companies have recently become the subject of reports questioning the veracity of their financials and other disclosures, or other rumours and speculation," Mr Tan noted.
Commodity trader Noble Group came under heavy short selling this week, with short interest as a percentage of the group's outstanding shares climbing to a record 14.15 per cent on Monday, according to Markit Group data tracked by Bloomberg.
Since Noble's accounting methods were called into question by an outfit called Iceberg Research, the counter's share price has taken a hit of more than 60 per cent. As at 1.32pm on Thursday, Noble shares were trading at S$0.415, one cent lower than at Wednesday's close.
Mr Tan also said: "Short sellers, commentators and research firms should be aware that the company is entitled to a right of reply and SGX is willing to allow a halt or suspension pending the preparation of the reply, if necessary, to prevent prices from being distorted by sudden and one-sided criticism. The exchange will also take action if the criticisms contain false or misleading statements."
"SGX will at the same time closely monitor the company's disclosures and trading activities of its shares, and constantly engage with the company. We will take all action necessary to maintain a fair, orderly and transparent market including working with other regulatory bodies," he added.