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SGX queries Pine Capital on appointment of HK-based directors

THE Singapore Exchange (SGX) has queried Pine Capital on the company's decision to add two Hong Kong-based directors to its board, David Sarkis and Chan Wai Leung.

Mr Sarkis was appointed a non-executive director of Pine Capital on Sept 12. Shortly after, on Oct 4, he was redesignated an executive director. Mr Chan was appointed an independent director on Oct 4. These appointments are part of Pine Capital's ongoing attempt to achieve a board composition in compliance with the Catalist listing rules.

In a bourse filing on Friday, SGX queried Pine Capital on what had changed in the short period between Mr Sarkis' initial appointment and redesignation, and what his plans are for the company. 

In response, Pine Capital said that Mr Sarkis had engaged more staff for his business, Silver Tree Hong Kong, and is now able to spend more time on Pine Capital. 

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Mr Sarkis plans to restructure the company, reconstitute the board and add new management and to resolve disputes and litigation, Pine Capital said, adding that he wants to expand the company's core business and enter new partnerships. 

Mr Sarkis also plans to raise capital from existing and new shareholders and to raise new funds under management through an entity compliant with the Monetary Authority of Singapore, Pine Capital said. 

SGX noted that both Mr Sarkis and Mr Chan are based in Hong Kong and have not served on the boards of other Singapore-listed companies. They both also have other businesses and commitments. 

It queried: "What are their plans for the Company, bearing in mind the various developments in the Group, including but not limited to, litigations and claims... and the fact that the company is suspended from trading in light of the unclear state of affairs and going concern issues?" 

On this matter, Pine Capital responded that both directors "are committed to understanding the Company's affairs and looking to assist in the resolution of outstanding matters" and that both have committed to further training on SGX's rules. 

SGX also asked why Mr Sarkis' stake in Pine Capital is held by another individual, Tan Sze Seng. The company said that Mr Sarkis had not opened a Central Depository Account at the time of purchase. 

On Mr Chan, SGX asked when he had been appointed a director of Advance Capital Partners Asset Management (ACPAM), the troubled unit of Pine Capital. Over the past months, ACPAM has been mired in allegations of conflict of interest and lapses of internal control.

Pine Capital responded that Mr Chan was appointed a director of ACPAM on Aug 12, and has since been aware of the developments there. 

The bourse asked Pine Capital to elaborate on what it considered in assessing Mr Chan to be on the company's board. Pine Capital responded that Mr Chan has been in managerial roles at accounting firms KPMG and PwC. He is also a member of the Association of Chartered Certified Accountants and the Hong Kong Institute of Certified Public Accountants, it said. 

SGX also requested for more details on Hong Kong-listed Brightoil Petroleum Holdings, where Mr Chan is a non-executive director. Brightoil has been suspended pending winding-up and forensic investigations. 

On this, Pine Capital said that Brightoil's auditor had requested for the company to conduct an independent investigation in relation to certain transactions. The review is ongoing and Brightoil is expected to resume trading at the start of 2020. 

Pine Capital has yet to achieve a board composition that is in compliance with listing rules, SGX noted in its queries. On this, the company said that it is in the midst of sourcing for additional non-executive or independent directors to fill the vacancy, with a target to complete this by end-October. 

Trading in shares of Pine Capital has been suspended since March. The counter last closed at S$0.001.