SGX reprimands Abterra chairman, CEO over breaches in listing rules

THE Singapore Exchange (SGX) on Thursday said it has reprimanded Abterra's executive chairman, Cai Sui Xin, and chief executive officer, Lau Yu, for breaches of listing rules.

It has directed Abterra - a supply chain manager in natural resources - to appoint a compliance adviser to advise Abterra on its continuing listing obligations, and has referred the case to the relevant authorities.

The reprimand is based on SGX's assessment of the report by PricewaterhouseCoopers to Abterra's audit committee, and responses given on behalf of Abterra, SGX said.

SGX said Mr Cai and Mr Lau breached listing rule when they failed to act in the interest of shareholders in relation to the acquisition of 22.8 per cent interest in Zuoquan Xinrui Metallurgy Mine Co Limited.

Abterra, under the two men's management, also breached listing rules when Mr Cai and Mr Lau caused Abterra to fail to immediately announce a reduction of Abterra's indirect shareholding in Shanxi Taixing Jiaozhong Coal Industry Company Limited (Jiaozhong) from 49 per cent to 24 per cent arising from the restructuring of Jiaozhong.

"The late disclosure of the material information would likely have caused the establishment of a false market for Abterra shares"

Abterra also breached listing rules when Mr Cai and Mr Lau caused Abterra to fail to immediately announce material changes in the terms of the sale and purchase agreement dated Dec 18, 2007 for the acquisition of 22.8 per cent in Xinrui. Similar to the Jiaozhong case, the late or non-disclosure of the material changes in the terms of the Xinrui deal would likely have caused the establishment of a false market for Abterra shares, SGX said.

"SGX-listed companies are advised to consult SGX before they appoint Mr Cai or Mr Lau as a director or member of their management," the bourse added.