Omega Capital barred from handling IPOs
Lee Su Shyan
Thu, Jul 24, 2008
The Straits Times
THE Singapore Exchange (SGX) has issued one of its most stinging criticisms of a corporate finance firm in Singapore.

It has barred boutique outfit Omega Capital from handling initial public offerings (IPOs) until the firm can get its act together.

The SGX said yesterday it 'was not satisfied that Omega had demonstrated its ability to meet the standards expected of an issue manager and financial adviser'.

The bourse operator said it has reviewed Omega's work since 2006 and found that it was not up to scratch.

It told the issue manager to appoint an independent professional firm to help it improve its performance.

The adviser needs to 'review and recommend improvements to Omega's internal processes, raise Omega's due diligence standards, and build up Omega's expertise and resources'.

Only when these are completed satisfactorily can Omega resume doing IPO work or acting as an adviser in deals such as mergers and acquisitions and reverse takeovers.

This is about the harshest criticism the SGX has dished out publicly to a financial firm.

In 2006, it criticised Stirling Coleman Capital only for not going far enough in its due diligence to resolve critical matters to the standard required of an issue manager in relation to new listing bids.

In November 2005, it asked another boutique firm, Westcomb Capital, founded by banker Choo Chee Kong, to improve its internal processes and due diligence standards.

Westcomb agreed not to take on new IPOs for three months, but it was allowed to continue with existing projects.

Mr David Tan, formerly of Keppel Bank, set up Omega and is now its chief executive. He could not be reached for comments.

The SGX did not disclose which IPO or deal had caused concerns over Omega.

It said, however, that it 'regularly reviews the work done by issue managers and professional advisers to maintain the standards of our market'.

The SGX said these professionals should 'maintain high standards of due diligence and expertise to give proper guidance to listing aspirants and listed companies'.

One recent incident cast Omega in a negative light.

Earlier this year, it acted as an adviser to the directors of International Capital Investment in a delisting offer. In an embarrassing reversal, it revised its opinion after it had already said the offer was reasonable. It reasoned that the financial terms of the offer were 'inadequate and, therefore, not reasonable'.

The change in its opinion arose from an incorrect assumption of liabilities. A revised circular had to be issued to shareholders of International Capital Investment.

Omega was also involved in advising Global Ariel when it bought China concrete maker AssetGold Finance last year. Global Ariel recently warned it probably incurred a loss for the second quarter of the year.

Separately, Oculus said Omega sued it for $97,156 in fees for acting as an independent financial adviser.

The sum has now been settled, according to Oculus.



'The Singapore Exchange was not satisfied that Omega had demonstrated its ability to meet the standards expected of an issue manager and financial adviser.'

THE SGX, in its assessment of Omega Capital, which is helmed by Mr David Tan

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