Elephant in the room: 'Change of control' situations
What minority shareholders of Chip Eng Seng should do at the extraordinary general meeting to be held on Sept 13.
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ON Oct 4, 2018, Chip Eng Seng Corporation (CES) received a trading query from SGX Regco after its share price had risen from the low 80 cents range in early September to as high as 96.5 cents on increasing volumes. Despite the query being issued at 4.27 pm, the company only requested a trading halt the following day prior to the start of trading. The sharp rise in price and volume of shares traded would seem to suggest that certain segments of the market knew of an impending corporate action.
The next day, the company announced that it had received notification from its major shareholders that they had sold approximately 29.73 per cent of the company's issued shares at S$1.08 per share. CES therefore joined the growing list of SGX-listed companies where new shareholders acquired just below 30 per cent of the issued shares from existing shareholders, without having to make a general offer to other shareholders.
The seven selling shareholders are all related and, with the exception of one, hold various senior appointments in the group. It was only three days later, on Oct 8, 2018, that the company clarified that two sisters, Lim Sock Joo and Dawn Lim Sock Kiang, would retain 1.55 per cent and 0.38 per cent of the company's shares respectively. All the other five shareholders would no longer hold any shares. Ms Lim Sock Joo is the wife of the executive chairman and group CEO, Chia Lee Meng Raymond. Ms Dawn Lim Sock Kiang would resign as executive director (ED) three days later.
