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SBI Offshore opens escrow accounts, asks to resume trading

CATALIST-LISTED SBI Offshore said on Tuesday that it would ask for its trading suspension to be lifted as it has opened the escrow accounts needed for its cash and cash equivalents.

Trading in SBI Offshore shares, which last closed at 6.1 Singapore cents, was suspended on March 21, 2019, after the former offshore and marine equipment distributor was deemed a cash company - that is, lacking a viable business - by bourse operator Singapore Exchange.

But the company will apply to the bourse to lift the suspension, the SBI Offshore board said in a filing.

It pointed to the placing of close to 21 million yuan (S$4.17 million) - from Chinese subsidiary Jiangyin SBI Offshore Equipment (JSBI) - in an account with the Shanghai branch of Malaysia’s CIMB Bank. That is on top of another US$11.1 million parked with CIMB’s Singapore branch.

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The latest deposit of funds is to sit in the Chinese account unless the bourse operator grants a waiver that lets SBI Offshore draw down on the account, or the company buys a business that meets bourse requirements for a new listing under a reverse takeover.

Otherwise, the funds can also be released if the company or JSBI go bankrupt or are wound up, or SBI Offshore is delisted, the board added.

SBI Offshore acknowledged that CIMB Shanghai is not an approved escrow agent licensed and approved by the Monetary Authority of Singapore, but said that it “has exhausted all means and efforts in engaging an approved escrow agent”.

“Due to differences in jurisdictions as well as banking regulations and practices in respect of escrow arrangements” in China, the company could not otherwise set up Chinese escrow accounts, despite approaching more than 15 financial institutions since March, the board said.

Still, SBI Offshore added that CIMB Shanghai could help it set up an escrow account in China “on largely similar terms as the Singapore escrow account”.

The company’s authorised representatives, who can take action related to the escrow accounts, are chief operating officer Mark Leong, chief financial officer Chong Wan Ling, and executive chairman Mirzan Mahathir, the eldest son of Malaysian Prime Minister Mahathir Mohamad.