SGX RegCo slaps Alpha DX with compliance notice after 4 directors quit over a fortnight

THE Singapore Exchange Regulation (SGX RegCo) has issued a notice of compliance to learning-solutions company Alpha DX Group after 4 directors of the firm quit over the span of just 2 weeks.

Under SGX RegCo's directives, Alpha DX will have to obtain and disclose "detailed explanations" from each of the 4 directors who have resigned - namely Chang Chi Hsung, Max Ng Chee Weng, Chew Yean Nee and Fabian Sven Bahadur Scheler - by Mar 16.

These explanations should include the detailed reasons for their resignation, whether there are any other material reasons or concerns behind the resignation, actions taken by each of these former independent directors in relation to areas of concerns that resulted in their resignations, as well as why each director considered it proper and appropriate to resign at this particular juncture.

Alpha DX is in the middle of responding to SGX RegCo's queries, and the board of directors is assessing the group's ability to operate as a going concern, noted the bourse regulator.

Based on the responses to be provided by each of these directors, SGX RegCo said it will make an assessment of the suitability of each of these individuals for the appointment as a director or executive officer for any issuer listed on the Singapore Exchange.

SGX RegCo also ordered Alpha DX to appoint new independent directors to its board, but said that the company is required to obtain prior approval from SGX for such appointments.

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With these 4 resignations, the company only has 3 remaining directors, including an independent director. Its audit committee does not have any members presently.

SGX RegCo also said trading in the company's shares should be suspended until there is clarity on its affairs, including the ability to operate as a going concern.

The regulator also asked the company to respond to the queries it had earlier issued by Mar 14.

SGX RegCo noted that there have been a string of events after the company's shares resumed trading on June 8, 2021. Prior to this, trading of Alpha DX shares was suspended in November 2019 due to going concern issues.

Among other things, Alpha DX had received a letter of demand dated Feb 18 from Kydon Holdings regarding the payment of S$1,900,937.75 for the remaining consideration and interest charges linked to the acquisition of equity interest in Zionext, while PrimePartners Corporate Finance (PPCF) had on Mar 1 terminated its continuing sponsorship agreement with the firm.

The company said on Mar 2 that it had received a writ of summons and statement of claim filed in the High Court by PrimePartners Corporate Finance for the sum of S$604,844.76 in unpaid sums payable under agreements between the 2 companies, and S$111,789.75 for late interest charges.

SGX RegCo said that where warranted, it may issue further directives to Alpha DX to further look into any areas of concern or to take appropriate regulatory actions.

In a bourse filing late on Thursday evening, Alpha DX said it has requested for a trading suspension, until there is "clarity on the affairs in the company", including its ability to operate as a going concern. 

Alpha DX also said that it had on Mar 9 made an application to Singapore's High Court for the grant of a moratorium under Section 64 of the Insolvency Restructuring and Dissolution Act, and will update shareholders on the status of the moratorium in due course. 

The company added that it is in the process of identifying  potential candidates to be appointed as independent directors to its board. 

Alpha DX last traded at S$0.112 before a trading halt was called on Mar 7.