12 | COMPANIES & MARKETS The Business Times | Thursday, October 9, 2014 Removal of one-share-one-vote rule ❚❚ CapitaMalls Malaysia Trust gets new CEO Different share classes allow public firms more flexibility in raising capital; offer investors a wider range of choices By Malminderjit Singh [email protected] @MalminderjitBT Singapore PUBLIC companies in Singapore will soon be able to offer shares with multiple voting rights, as parliament approved a bill on Wednesday resulting in the largest number of proposed reforms to the Companies Act since its enactment. The Companies (Amendment) Bill proposed the removal of the one-share-one-vote restriction for public companies, to give them greater flexibility in raising capital, and provide investors with a wider range of investment opportunities. "The United States, the United Kingdom and Australia already allow companies to issue classes of shares with different voting rights subject to the companies' articles, although in Australia, listed companies are prevented from doing so by listing rules," Senior Minister of State for Fi- nance and Transport Josephine Teo said in Parliament. "Clearly, there are benefits and drawbacks in allowing shares with different voting rights. However, I should point out that the concept of such shares is not entirely new in Singapore and they have been permitted in private companies for some years." Moreover, Mrs Teo added that in the Companies Act amendments of 2003, the one-share-one-vote restriction was lifted for private companies that are subsidiaries of public companies and that the government has now decided to lift the restriction in the Companies Act for public companies in view of global developments and demands of increasingly sophisticated investors. "The change will not affect listed companies for now, as MAS and SGX are still deliberating on the issue. Rather, it is the 800 or so non-listed public companies that can take immediate advantage of the liberalisation." Some members of Parliament, however, expressed concerns on whether Singapore should allow a different shareholder classification regime. Ong Teng Koon highlighted the need to mitigate the risks in allowing shares with different voting rights, while Liang Eng Hwa called on educating retail investors on this change as well as raising the question of determining prices for the different classes of shares. "Mr Ong has highlighted the need to mitigate the risks in allowing shares with different voting rights. Although Mr Ong's comments are made in the context of shares of listed companies, I would like to assure members that the Bill will put in place checks and balances for all public companies, whether or not they are listed." Specifically, she added, the Bill will require public companies to specify the rights for different classes of shares in their constitutions, and clearly demarcate the different classes of shares so that shareholders know the rights attached to any particular class of shares. On Mr Liang's point, Mrs Teo explained that pricing of different classes of shares will be determined by the issuing companies and may involve valuation by investment banks and road shows with potential investors. "Ultimately, investors will have to assess whether the premiums or discounts offered for each class of shares are fair." This measure came out of a comprehensive review of the Companies Act done by a Steering Committee led by Professor Walter Woon, set up by the Ministry of Finance (MOF). Other amendments to the Companies Act include the introduction of a "small company" concept to determine audit exemption, replacing the current criterion where a company is exempted from auditing its accounts annually only if it is an exempt private compa- Mrs Teo says “it is the 800 or so non-listed public companies that can take immediate advantage of the liberalisation” ny and has annual revenue of S$5 million or less. "In future, to qualify for audit exemption as a ‘small company’, a company must be a private company that meets at least two of three criteria for each of the previous two financial years, which are: total annual revenue not more than S$10 million; total assets not more than S$10 million; or number of employees not more than 50," Mrs Teo explained. Global Yellow Pages inks first property deal By Andrea Soh [email protected] @AndreaSohBT Singapore GLOBAL Yellow Pages, in its first-ever deal in the real estate sector, is planning to buy a shopping mall and its accompanying land in New Zealand. This, however, will be done in a roundabout way, through an intermediate firm controlled by Global Yellow Pages’ CEO Stanley Tan and director Pang Yoke Min. The original owners of the freehold shopping mall – Ladstone Pakuranga Limited and Ladstone Pakuranga Management Limited – had first sold the property to Pakuranga Plaza Limited (PPL) on Sept 9 for NZ$96 million (S$95.8 million). The mall, which is located in the centre of Pakuranga in Auckland, oc- cupies 39,209 square metres, and has retail and office space with a gross lettable area of 29,541 square metres that is occupied by about 100 tenants, including major department stores and supermarkets. Under the terms of the deal, PPL had to pay 5 per cent of this amount as a deposit by Oct 8, and another 5 per cent when it obtained approval under the Overseas Investment Act of New Zealand. The remainder was to be paid on the settlement date stipulated in the agreement. Global Yellow Pages had wanted to buy PPL shares directly from its previous shareholder, but this acquisition would have been conditional on the approval of its shareholders in a general meeting. Ladstone Pakuranga Limited and Ladstone Pakuranga Man- agement Limited had not wanted any condition allowing PPL to defer completion of the acquisition until the firm had obtained all regulatory approvals. Therefore, another intermediate firm Pakuranga Plaza Holdings – set up in New Zealand for this acquisition and controlled equally by Mr Tan and Mr Pang – on Tuesday bought over all the PPL shares. Global Yellow Pages will be taking over all of PPL shares for NZ$38.4 million, which it intends to finance through a rights issue completed in June and internal funds; PPL intends to borrow S$57.7 million to finance its own purchase of the property. The NZ$38.4 million that Global Yellow Pages will pay to Pakuranga Plaza Holdings will comprise: a deposit of NZ$9.6 million when PPL’s deal with the mall’s original owners is declared unconditional; a deposit of NZ$28.8 million a day before the settlement date of that deal, and NZ$1 when Global Yellow Pages has obtained consent from its shareholders in an extraordinary general meeting and regulators. If approval from shareholders or regulators is not granted, Pakuranga Plaza Holdings, with Mr Tan and Mr Pang as the guarantors, will together repay the first two deposits to Global Yellow Pages within 40 days. Global Yellow Pages said that this acquisition will enable the group to diversify into real estate, in which it sees potential for long-term growth and in which both its chairman Mah Bow Tan and Mr Tan have significant experience. According to a valuation report by IN BRIEF property consultancy JLL dated Feb 6 this year, with the purchase price of S$96.2 million and an occupancy rate of about 97 per cent, the net rental yield of the property is about 8.1 per cent. “The acquisition is therefore income accretive in nature, and will generate profits that may be used to fund the working capital of the group,” Global Yellow Pages said in the announcement. The firm, which has also identified food and beverage as another sector to diversify into, had also last month completed the purchase of the intellectual property rights held by Wendy’s Supa Sundaes and Innovation Ice Cream for A$10 million (S$11.7 million). The counter, which has fallen 46.4 per cent so far this year, dipped 0.1 Singapore cent to close at 4.3 Singapore cents on Wednesday. CapitaMalls Malaysia Trust (CMMT) has announced that Sharon Lim, CEO of the trust manager CapitaMalls Malaysia Reit Management, has resigned for personal reasons. She will be succeeded by her deputy, Low Peck Chen, from Nov 1. “Ms Lim will help facilitate the leadership transition until the end of the year,” CMMT said on Wednesday. MLT buys two assets in China for 402.8m yuan MAPLETREE Logistics Trust has completed the acquisitions for two logistics parks in Shanghai and ZhengZhou in China for a total amount of 402.8 million yuan (S$83.9 million). Both are fully funded by debt; MLT’s total leverage ratio has therefore risen to about 35.2 per cent. Raffles Education to list subsidiary in Hong Kong RAFFLES Education will be spinning off a subsidiary, Oriental University City Holdings (HK), on the Growth Enterprise Market on Hong Kong’s stock exchange. The listing is subject to clearance from Singapore Exchange and the approval of the Stock Exchange of Hong Kong. Sino Grandness gains Thai investors SINO Grandness Food Industry Group is issuing a total of 86 million new ordinary shares at S$0.61 each to two Thai conglomerates. Thoresen Thai Agencies will hold a 9 per cent stake with its subscription of 60.6 million shares, while PM Group will own 3.77 per cent with 25.4 million shares. Gain Confidence & Be A Positive Influence On Your Customers Who should attend: Senior and Middle Management, Supervisors, Team Leaders and other General Managers, Business Owners, Sales and Business Development Managers, Corporate Communications and Marketing Managers & Executives, and anyone who wishes to achieve higher success in their career. 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