Involuntary Delisting from Singapore Exchange and the Efficacy of the Exit Offer Requirement

Abstract

The recent saga relating to the involuntary delisting of Jets Technics International Holdings Limited (Jets Technics) from the Singapore Exchange (SGX) highlights the problem faced by minority shareholders when their companies or issuers are mandated to delist from the SGX. While the SGX, the Australian Stock Exchange (ASX) and the Hong Kong Stock Exchange (HKSE) have similar rules which allow the stock exchange to mandatorily delist companies in certain specified circumstances, the SGX appears to go further than ASX and HKSE by requiring the issuer or its controlling shareholders to make an exit offer to the minority shareholders in conjunction with the involuntary delisting. However, the case of Jets Technics illustrates the difficulties in ensuring compliance with the requirement of the exit offer.

This note discusses the difficulties arising in enforcing an exit offer in conjunction with an involuntary delisting, using Jet Technics as an illustrative example, and suggests some possible reforms. The case of Jets Technics may also provide some cautionary guidance to policy-makers of other stock exchanges who are considering putting in place minority shareholder rights in connection with involuntary delistings.