New Century fiasco: Don't keep us guessing
by admin , May 6, 2010, 1320hrs
By Loh Chee Kong
cheekong@corporateobserver.com.sg
More than 40 hours have passed – and dozens of news stories have been filed – and the market is still none the wiser over what really happened with New Century Shipbuilding’s botched initial public offering (IPO).
Speculations abound, with various sources close to the matter offering collaborative accounts that the withdrawal was indeed due to the Chinese shipbuilder’s failure to disclose the fact that its subsidiary was facing a US$60 million lawsuit filed by Singapore-based Sino Noble. Worse, it even allegedly reflected the cancelled orders – worth US$180 million – on its books.
As far as investors are concerned, having a rough idea of what happened – as compared to being totally kept in the dark – was cold comfort.
Assuming the rumours are true begs the bigger questions: How did it happen? How did New Century get so far – the IPO was withdrawn less than 12 hours before it was slated to close, with application monies already in its pocket? How did the material misrepresentation and potential liabilities slip past all the sets of eyes – belonging to astute professionals no less – working on the offering? How can a lawsuit involving a Singapore company, which would easily turn up in a search on public records, be kept under the table for so long?
These questions – and many others – have largely been stonewalled.
New Century management cannot be reached because they are apparently up in the air – like the fiasco they have caused.
The deal’s underwriters Morgan Stanley and UBS AG have not been forthcoming. In response to media queries, Morgan Stanley declined comment while UBS would only say the deal was postponed “because of technical issues".
The Singapore Exchange (SGX) and the Monetary Authority of Singapore (MAS) cited their practice of not discussing their dealings with individual companies.
So, in the meantime, the rumour mill goes into overdrive: Reports are now emerging that a poison pen letter was sent to SGX, while another rumour goes that UBS was the one which blew the whistle.
There is also speculation that the New Century directors and others involved in drafting the prospectus could face criminal action.
There could very well be an investigation going on and a gag order in place – but is this the kind of transparency we aspire to?
Investors, especially those who have plonked their money in New Century’s IPO only to have them returned several days later minus any interest, deserve more answers.
We would like to take a leaf out of SGX’s books – in the way it diligently questions companies on their trading activities.
So, in the same spirit of transparency, we would like to pose the following questions to Morgan Stanley, UBS, SGX and MAS:
Question 1: Are you aware of any information not previously announced concerning New Century, its subsidiaries or associated companies which, if known, might explain the pullout?
- If yes, the information must be announced immediately.
Question 2: Are you aware of any other possible explanation for the pullout?
Question 3: Can you confirm New Century’s compliance with the IPO rules?
Please respond immediately. Thank you for your cooperation.
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