SGX RegCo queries DLF on offeror's intent, directors' ties with offeror

THE Singapore Exchange Regulation (SGX RegCo) on Thursday asked DLF Holdings to disclose its responses to the exchange's queries, among other things, on the rationale and intent of QRC Pte Ltd's offer and the relationships between the offeror, the group and its directors, key management and associates, if there are any.

This followed QRC's purchase of a 57.16 per cent stake in the mechanical and electrical engineering services provider earlier this month, from Wong Ming Kwong, the controlling shareholder, former CEO and former executive director, as well as Fan Chee Seng, controlling shareholder, executive chairman and executive director of the company.

QRC bought more than 69 million shares from the duo at about S$0.0809 each. Upon triggering a mandatory unconditional cash offer for the company, it proceeded to do so at a consideration of S$0.081 per offer share.

DLF was listed in July last year at S$0.23 per share. The offer price carried a 56 per cent discount to the company's last transacted price, and also significant discounts to the one-month, three-month and 12-month volume-weighted average prices of DLF.

SGX RegCo noted that QRC, as a company that provides business and management consultancy services, is completely different from DLF's existing business.

In addition, Mr Fan is the founder of the group and the sole executive director currently. "SGX RegCo is of the view that the rationale for Mr Wong and Mr Fan entering into sale-and-purchase agreements to sell their shares at the sale price to the offeror constitutes important information for shareholders in deciding whether to accept the offer."

SGX RegCo added that since DLF's IPO last year, the regulator had noted developments in the group, particularly to do with changes to the board and key management as well as termination of a "key project", which have led it to issue queries to the company.

It thus requested independent directors to scrutinise the independent financial adviser's opinion before making their recommendation to shareholders, and for QRC to set out its business plans and future direction for the group in the offeree circular, in view of its plans to keep DLF listed post-offer.

It added that SGX RegCo reserves the right to take disciplinary action against the company or relevant persons should listing rules be breached or any of the exchange's requirements not be complied with.

DLF last closed at S$0.185 on Sept 5.