Something old, something new from SIAS

NEARLY two decades of taking the cudgels for minority shareholders in the equities realm here in Singapore, the Securities Investors' Association of Singapore (SIAS) has a new message for a different class of investors, this time of bonds - we got your back (too).

Indeed, it must be rejuvenating to be 18 years old with a 'keen clientele' and still be experimenting and morphing with its raison d'etre.

"It started out as an experimental year. It was an unknown game at first unlike equities...but now we have become an established platform for bondholders," says David Gerald, SIAS' founder and chief steward in an interview with The Business Times.

That may be an understatement. Since October 2016, when the activist body stepped up to the plate for worried bondholders of Rickmers Maritime - the first group of troubled investors of distressed offshore and marine services firms whiplashed by plumbing oil prices that sought its help - SIAS has now assisted many hundreds of them.

Think Marco Polo Marine, Ezra Holdings and Nam Cheong and even branching out to lend a hand to frazzled bond investors of Indonesia's mobile phone operator and Singapore-listed Trikomsel.

Bond-ing with investors

SIAS' aid, based on expertise mastered since the late '90s when Mr Gerald had set up the shareholder advocacy group to resolve the prickly Clob issue in Malaysia on behalf of Singapore investors, essentially involves offering a powerful one voice to a highly disparate group of bond investors and connecting them to the issuers facing hardship. It makes sense that this is an issue SIAS, whose linchpin, very simply put, is investor engagement, would care about.

"It has to be amicable, not aggressive. The advantage of these dialogue sessions is so that investors are no longer left in the dark, " he says, visibly pleased with the outcomes so far.

There is comfort in big numbers and SIAS is also empowering bondholders to set up steering committees among themselves to push their interest agenda forth with companies. For starters, this has been done with troubled Malaysian shipbuilder Nam Cheong.

Mission equity

That's not to say the agenda in the equities market has become any less spirited or is on auto pilot. Far from it.

This year marks the 18th run of SIAS Investors' Choice Awards where Singapore's most well-behaved and responsible listed companies step up to the rostrum and are rewarded for their good behaviour after being ranked on several key governance metrics.

To deal with shareholder passivity, it has pored over the annual reports of over 200 companies to put up three questions for shareholders to ask at annual general meetings. For the current financial year, it expects to amp up the coverage to 350. Not bad for an initiative that only began mid last year.

Most companies have embraced this push, responding promptly or at the AGM with some enterprising ones posting the responses on their SGX announcements. But as always, there are recalcitrants.

"Some companies are stalling as this is new to them. 'How come SIAS is not a shareholder but is sending us questions?', they may think," says Mr Gerald.

A rap may be in the offing as SIAS intends to name and shame the obedient and obstinate firms in its annual reports soon.

The big question

"Is SIAS necessary any longer?", asks Mr Gerald who has visibly wrestled with that question long before now.

The short answer - yes but it needs to be fundamentally upsized.

By that, he means it's time for the group to be funded by not companies, as it stands now, but by perhaps, the regulators.

"We maintain our independence and have never held back questioning companies but there's a perception that because certain companies fund us, it puts our independence into question."

The other thing on his wishlist is to have more teeth to represent disgruntled shareholders in court by way of class action.

"Haven't we reached a state where we now should be recognised for having some locus standing in courts where we can take up the cases on behalf of shareholders?", he asks.

It's an interesting ponderance no doubt for an organisation that has come this far and especially given that corporate activism is unlikely to run out of fashion anytime.