Iconic Singapore chili crab restaurateur No Signboard Holdings attributed the surge in its share price last week to a mishandled share buyback by the company, it said in a filing to SGX on Sunday. It added that buybacks were temporarily on hold as a result.
The company had received a query from SGX over trading activity in its shares after they surged 23.97 percent on Thursday to the day’s high of S$0.15 in a surge of volume, before No Signboard requested a trading halt during the mid-day break.
In response to the SGX query, No Signboard noted shareholders had approved a share buyback mandate at its annual general meeting on Thursday morning.
After the approval, Executive Chairman and CEO Lim Yong Sim had instructed the company’s brokerage, UOB Kay Hian, to queue to buy shares at a price of up to S$0.14, with a total of 1.07 million shares purchased as of 12:12 P.M. SGT on Thursday, the filing said.
“This was an honest mistake on the part of Mr. Lim as he did not notice that the share purchase at prices of up to S$0.14 exceeded the 5 percent cap above the average closing price of the last five days permitted under the share buyback mandate,” No Signboard said, adding that would have been S$0.12226 on Thursday.
In addition to breaching listing rules by exceeding the share price cap, the buyback also breached “black-out period” rules, No Signboard said in response to SGX’s query on whether the company could confirm its compliance with listing rules.
“The shares purchase transaction was thus undertaken before the company’s 1Q2019 results were announced on 1 February 2019, which was still during the dealing restriction period for dealing in the securities of the company,” No Signboard said.
In response to the mishandled share buyback, the company’s sponsor, RHT Capital, has directed Lim to attend directors’ trainings to “re-familiarize himself with the listing rules and other relevant regulatory requirements.”
In addition, RHT Capital directed the company to develop an internal policy for share buybacks for immediate implementation, including the board’s necessary approvals, the filing said.
“No share buyback shall be conducted by the company until the policy is approved by the board and properly implemented,” the filing said.
No Signboard said it wasn’t aware of any other possible explanation for the trading, and in a separate filing requested that the trading halt on its shares be lifted as of 8:30 A.M. SGT on Monday.