Bellagraph, Hin Leong sagas show weak spot in exempt private companies

THE recent debacle over Bellagraph Nova (BN) Group - and the rollover impact on Catalist-listed Axington - revives long standing calls for improved disclosure standards when it comes to Exempt Private Companies (EPCs).

Under the Companies Act, Singapore-incorporated firms that do not have more than 20 shareholders and do not have any corporations holding beneficial interest in their shares, whether directly or indirectly, count as EPCs.

Regardless of the size of their assets or turnover, solvent EPCs are not required to file financial statements with their annual returns. They are also allowed to undertake certain types of transactions that other companies cannot, such as extending loans to a director.