Reverse takeovers and shifting business strategies involving firms on Singapore's stock market have come under the spotlight in the wake of the recent collapse in share prices of three companies listed on South-east Asia's biggest bourse.
One of the companies, Blumont Group, lost as much as $6.2 billion in market value in the past week. Prior to that, it had surged as much as 12-fold this year, making it Singapore's top performer.
The company, which listed in mid-2000, has shifted its focus between investment (most recently in mining companies), property development and sterilised-food and medicine packaging.
As part of one reverse takeover, Asia Pacific Strategic Investments, a funeral-service provider in Malaysia, is transforming itself into a mining company with assets in Armenia.
A new investor is buying a 30 per cent stake in the restructured firm for $200 million, implying a total value of $667 million. Previously, the company had a market value of about $10 million.
"We have been making losses for the last three to four years. So the company has been looking for a new business or new life," said chief financial officer Lee Keng Mun. "We believe this gold mine is a profitable business project."
The changes in business operations and the use of reverse takeovers - where a private firm buys a public company usually to bypass an often-lengthy listing process - and their impact on the broader market risk undermining the credibility of one of Asia's biggest financial and regulation centres.
"It's one thing to change businesses like that if you're a closed-end investment fund, but if it's a listed company and it keeps chopping and changing, then that raises all sorts of governance concerns, because, as a minority shareholder, you don't then know what you're a shareholder of," said Mr Jamie Allen, secretary- general of the Asian Corporate Governance Association.
The metamorphosis of a handful of small Singapore companies has made them among the most actively traded on the Singapore Exchange (SGX).
As of last week, many of the top-10 performers this year, with gains of 200-900 per cent, had started new businesses or said they were exploring such forays.
The SGX queried most of these companies on the price surge.
"Sometimes, these things (new ventures) can go either way for the smaller investors," said Mr Jimmy Ho, president of the Society of Remisiers (Singapore)."It's better if the authorities can do adequate due diligence beforehand."