SIAS urges authorities to probe OSIM’s takeover blunder

Some shareholders may have suffered losses.

The Securities Investors Association (Singapore) has urged the Securities Industry Council (SIC) to investigate OSIM’s costly privatisation error, in which the lifestyle company mistakenly bought 17 million shares above its final offer price of $1.37 per unit.

On April 5, OSIM revealed that it had revised its final offer price to $1.39 cum dividend and $1.37 ex-dividend. The revised offer stated that the final offer price will not be raised further.

However, Credit Suisse, which works on behalf of OSIM, revealed on April 11 that it had “inadvertently” acquired 16,984,200 ex-dividend shares at prices ranging from $1.38 to $1.39 after the revised announcement was made on April 5.

In a letter to the SIC, SIAS President & CEO David Gerald said that OSIM’s blunder might have resulted in the creation of a false market for OSIM’s shares on April 5 and may have resulted in losses for some minority shareholders.

“[This] may have led to shareholders selling their shares at prices below $1.39 on 5th April 2016. SIAS is concerned that shareholders who had sold their shares at prices below $1.39 on 5th April 2016 relying on the announcement on 5th April 2016 may have suffered losses,” Gerald noted.

SIAS appealed to the SIC to investigate whether a false market had been created for OSIM’s shares due to the incongruent share purchases, and whether shareholders who had sold their shares at prices below $1.39 on April 5 may have suffered losses.

SIAS also asked the SIC to determine whether the shareholders who had suffered trading losses on 5th April should be properly compensated, particularly as the Takeover Code stipulates that all shareholders must be treated equally.