SINGAPORE (Feb 6): Embattled water treatment firm Hyflux and technology company Trek 2000 are among dozens of Singapore-listed companies that have been ordered by the regulatory arm of the Singapore Exchange (SGX) to perform quarterly reporting (QR) of its financial results.
This follows the regulator’s adoption of a risk-based approach to reporting, applying QR requirements only for companies associated with “higher risks”.
While encouraged to consider voluntarily providing regular business updates to shareholders, all other companies are only required to do semi-annual reporting of their unaudited financial statements.
“A risk-based approach is more appropriate because it targets companies that are of greatest concern to regulators and investors, enabling more effective monitoring of how their concerns are being addressed. In contrast, a reporting requirement based on market capitalisation would not necessarily cover these companies,” said SGX RegCo on Jan 9.
Under the new approach, a company would only have to report its financials on a quarterly basis if it has received a disclaimer of opinion, adverse opinion or qualified opinion from its auditors on its latest financial statements, if its auditors have expressed a material uncertainty relating to going concern on its latest financial statements or if the regulation has regulatory concerns with the company, for example if it has had material disclosure breaches or where it faces issues that have material financial impact.
The market regulator went on a Notice of Compliance (NOC) spree after market close on Thursday. Companies such as Hyflux and Trek 2000 were among those issued with an NOC on Feb 6, ordering them to “perform QR till further notice from SGX RegCo.”
For Hyflux, the bourse cited concerns surrounding its related disclosure issues, as well as the group’s compliance with accounting and auditing standards.
Trek 2000 was issued with an NOC on the back of the modified opinion issued by the company’s statutory auditor in its latest annual report.
Other companies include Best World International, Yuuzoo Networks Group, Y Ventures and Reenova Investment Holding (formerly known as ISR Capital).
Companies mandated to do QR will also be required to include a statement on the cover page of their quarterly results to state that the QR announcement is mandatory and made pursuant to the exchange’s requirements.
“Pursuant to Mainboard Rule 1405(4), failure to comply with the requirements in this notification shall be deemed as a contravention of the Listing Rules,” says SGX RegCo,
SGX RegCo adds that it reserves the right to take disciplinary action against the company for breaches of the listing rules, including any failure to comply with the requirements imposed by the exchange
