Protecting investor interests in Singapore stock market

I refer to the letter by the president of The Society of Remisiers (Singapore), "Protecting investor interests critical to rebuilding investor confidence in Singapore stock market" (BT, 24 March).

Besides the suggestion of class action suits, I think there is the greater need for Singapore to seriously consider setting up a separate regulatory body independent of Singapore Exchange (SGX), to eliminate the conflict of interests of being a dual profit-seeking entity and as a regulatory body.

Let me cite this sad episode of several years ago involving the then-listed stock China Paper, a company involved in making paper from wood pulp in China. For the first three years, the company was doing fairly well and rewarded shareholders with decent dividends, so many investors including myself thought it was a good basic industry business and bought into it. However, in the fourth year, the company started its ploy and announced its first rights issue, saying that the business needed to grow bigger to achieve better economies of scale to survive; of course the share price fell. Just a little over a year later, it called for a second rights issue with the excuse that the company needed more money to buy a small power station to ensure a more regular supply of electricity to run its log mills.