Time to take another bite of S-chips
Numerous scandals involving S-chips have tarred these mainland-operating, S'pore-listed companies with the same brush. But do all S-chips deserve their bad reputation?
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IT WAS meant to be one of the Singapore Exchange's (SGX) success stories. One of our biggest skincare companies, Best World International, saw its profits grow almost 40-fold between 2013 and 2017. It was valued at S$1.8 billion at its peak in February 2019.
The stock lost its lustre when shocking allegations of wrongdoing by shortseller Bonitas Research and further pressure by the authorities forced the mainboard-listed company into clarifying its previous denials, confessing that the owner of its largest client, import agent Changsha Best, was in fact Best World's CEO's brother-in-law. Its share price plunged 9 per cent as it halted its trading on April 24, 2019.
Said the SGX: "The revelation of the relationship between Changsha Best and the company's CEO and managing director raises serious concerns about the veracity of China sales conducted under the export model from 2015 to 2018 and whether these were conducted on normal commercial terms."
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