EARLIER this year, a listed company here embarked on a non-underwritten rights issue to raise money for investment and working capital and, presumably to enhance the attractiveness of the offer, its announcements on the rights issue highlighted the fact that the company's substantial shareholder had given an "irrevocable" undertaking to fully subscribe to its portion.

The Encarta World Dictionary gives the meaning of "irrevocable" as "not able to be revoked, undone or changed", so it appeared that no matter what, the substantial shareholder would have had to fully take up its share.

Put another way, the company appeared to be guaranteed several million dollars from its biggest single shareholder which, it has to be said, had to be confidence-boosting to other shareholders pondering whether to take up their rights.