Aussino plunges after SGX rejects deal with Myanmar-linked firm

SINGAPORE - Shares of Aussino Group Ltd plunged by more than half after the Singapore Exchange rejected its application for a S$70 million reverse takeover deal with a company linked to a Myanmar tycoon who is on the US sanction list.

Aussino shares fell as much as 58 per cent to S$0.071, the lowest since June last year, after a trading halt was lifted. Nearly 114 million shares were traded, 19 times the average full-day volume over the past 30 days.

Aussino shares had previously run up after the Singapore bed linen retailer said last year that it will issue new shares to buy the energy business of the Max Myanmar Group, headed by Myanmar tycoon U Zaw Zaw.

If the transaction were to succeed, Zaw Zaw would have become the new controlling shareholder of Aussino. The company was planned to operate petrol kiosks in Myanmar, a Southeast Asian nation that has emerged from decades of isolation.

But Aussino said on Monday the Singapore Exchange (SGX) is"unable to proceed with the review of the application as major issues have not been adequately resolved."

SGX said Zaw Zaw remained on the US sanction list and there is a lack of clarity on why he was placed on that list.

The tycoon's related companies had also been alleged to be involved in human rights violations in connection with forced land acquisition by the former Myanmar government, as well as tax investigations by the country's tax authorities, SGX said.

The bourse also voiced its concerns about Aussino's access to the land critical to its operations after the proposed acquisition, and the company's plan to place a significant proportion of its cash with a Zaw Zaw-owned bank which is on the US sanction list.

"Based on what they announced, it's very unlikely that they can push it through. The share price had gone up a lot because of hopes for the deal, but people are now rushing to exit," said a trader.