Non-compliance sends FM Holdings off the Catalist

Singapore Exchange delists the ODM and OEM manufacturing company for failing to engage a sponsor for more than 3 months.

Singapore Exchange (SGX) on Thursday directed the delisting of FM Holdings Limited (FM Holdings) from Catalist as the company failed to engage a sponsor for more than 3 continuous months as required by Catalist Rule 745(5), according to an SGX report.

The SGX report said this is the first directed delisting of a Catalist issuer since the market was established in February 2008.

Catalist, a sponsor-supervised listing platform, requires its companies to have a sponsor at all times. Sponsors’s responsibilities are to supervise and advise Catalist companies on corporate governance matters and compliance with the Catalist rules.

SGX said rule compliance and the veracity of disclosures are called into question in the absence of sponsors.

FM Holdings was listed (on the then SESDAQ) in May 2005 and transited to Catalist with the appointment of a sponsor in September 2008. In January 2010, FM Holdings’ sponsor, PrimePartners Corporate Finance Pte Ltd, as well as 2 of its Independent Directors, resigned from their appointments. The Board of FM Holdings took into consideration the recommendation of the former sponsor and requested for suspension of trading in its shares since 23 March 2010.

The last day of appointment of the Former Sponsor was 18 April 2010. Under Catalist Rule 745(5), FM Holdings is required to appoint a sponsor by 18 July 2010 (the “Deadline”). Since the Former Sponsor resigned in January 2010, the Company failed to appoint a sponsor for six months. It applied to SGX for a one-month extension to allow a prospective sponsor to complete due diligence prior to engagement. The company has since informed SGX that it is unable to secure a sponsor within the extension of time requested.

The former sponsor and the independent directors resigned due to the lack of transparency in the management of the Company. SGX said they were concerned that they could not effectively discharge their duties due to lack of information and transparency by FM Holdings’ management.

SGX said it has required FM Holdings to update shareholders on its delisting.