Rejuvenate suspended companies through reverse takeovers

I REFER to the article "SGX's move to suspend stocks a case of damned if you do, damned if you don't" (BT, 19 June). It mentioned the "gloomy prospect" of having the number of suspended companies on the Singapore Exchange doubling in the last three years to 41 companies.

The regulators have the unenviable task of dealing with these companies which are mainly either in financial distress or have regulatory issues. Equally gloomy for shareholders of these companies is that so far only one in eight made it back to being relisted. Though investors are likely to have lost a significant part of their investment, relisting of these suspended companies is vital for shareholders as they would then have a chance of recouping their losses or are at least able to cash out at the traded price.

I believe shareholders of suspended companies would benefit if SGX can make it easier through less stringent requirements, and quicker through fast tracking for entities interested in engaging in a reverse takeover of companies which are long suspended. This could even be extended to those that are illiquid and have a small market capitalisation as their shareholders are basically in the same boat. It makes sense to have less stringent requirements for such cases as a reverse takeover allows existing shareholders to trade in their shares, giving it value and essentially saves investors from a shareholders' limbo. Moreover, the new major shareholders entering these companies are more likely to settle any financial or regulatory issues and rejuvenate the company.