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THE Securities Investors Association of Singapore (SIAS) has urged independent shareholders of China New Town Development Company to "vote rationally" and understand the rationale for the delisting of the dual-listed company from the Singapore Exchange (SGX).
Shareholders should also understand the company's fundamentals, future business strategy and the benefits of leveraging the strong support from the controlling shareholder CDB Capital, said SIAS president and chief executive David Gerald in a statement.
As the majority shareholders who hold 69.3 per cent interest in aggregate are not allowed to vote, only independent shareholders in both Singapore and Hong Kong are allowed to vote on the proposal which ensures their rights are preserved.
"Therefore it is important that all minority shareholders cast their vote and voice their option," he said, adding that the independent financial adviser (IFA) has deemed the terms of the selective share buyback fair and reasonable.
China New Town is the third dual listed S-chip listed on both SGX and the Stock Exchange of Hong Kong (SEHK) that has sought a delisting from the local bourse since 2013.
The company has proposed to make a cash exit offer of seven Singapore cents per share to all shareholders by way of a selective share buyback. Shareholders who do not wish to trade on SEHK can tender all or some of their shares to the company. Alternatively, they can hold on to their shares to trade in Hong Kong, through their brokers here. Currently, the shares are trading at approximately 13 per cent premium in Hong Kong as compared to Singapore, Mr Gerald pointed out.
The delisting is not a privatisation exercise as the company intends to maintain its primary listing on SEHK's main board and has made arrangement for the shares to be transferred from Singapore to Hong Kong for trading.
According to Mr Gerald, at a recent dialogue session conducted by SIAS in Singapore with the company and independent shareholders, many had voiced concerns over the cost of depositing their shares with local brokers and trading the shares in Hong Kong.
While most local brokers charge a custody fee in such instances, SIAS's checks revealed that some brokers provide fee waivers, hence shareholders should consult their brokers on the matter, he added.