SINGAPORE, July 19 |
SINGAPORE, July 19 (Reuters) – Singapore Exchange Ltd
is toughening rules for companies looking to list on
its main market in the wake of a series of accounting scandals
at small Chinese firms listed on the bourse.
Recent scandals at companies such as KXD Digital
Entertainment have dealt a blow to the reputation of
SGX-listed companies, and the exchange said on Thursday that it
was tightening its regulations to make it more attractive for
larger firms to go public in the city state.
It also said it was planning to up the proportion of shares
made available to retail investors in initial public offerings.
“I think retail investors will reap significant benefits in
terms of having wider access to new IPOs. At the same time, they
can be better assured that companies listed on SGX are of good
standing and quality,” said David Gerald, president of
Securities Investment Association of Singapore.
Under the new rules, to take affect on August 10, companies
looking to list must have a market capitalisation of at least
S$150 million ($119.2 million), have made a profit in their last
financial year and have an operating track record that stretches
back at least three years.
Firms with an operating track record that does not meet
requirements must have a market capitalisation of at least S$300
million, while those with market capital below S$150 million
should have made a pre-tax profit of at least S$30 million in
the last financial year and have an operating record stretching
back at least three years.
China’s KXD has applied to be wound up after announcing in
January this year that it was being investigated by the
Singapore police for offences under the Securities and Futures
Act.
China Sky Chemical Fibre Company is also being
investigated by Singapore regulators and police and announced in
April that its auditors had resigned.
($1 = 1.2586 Singapore dollars)
(Reporting by Rachel Armstrong; Editing by Joseph Radford)