Sil­ver­lake Seek­ing Le­gal Ad­vice On Libelous "Investing" Report

The Star, 27 Aug 2015

PETALING JAYA: Shares in Sin­ga­pore-listed Sil­ver­lake Axis Ltd tum­bled 17.5 Sin­ga­pore cents to 46 Sin­ga­pore cents, the com­pany’s low­est since Fe­bru­ary 2013, af­ter a two-day trad­ing halt as in­vestors re­mained con­cerned over al­le­ga­tions made by an anony­mous re­port re­leased last Thurs­day.

The soft­ware so­lu­tions provider noted that its share price had ex­pe­ri­enced a sig­nif­i­cant fluc­tu­a­tion on Aug 21, lead­ing to a query from the Sin­ga­pore Stock Ex­change and to the com­pany re­quest­ing a halt in the trad­ing of its shares. The pur­pose of the halt was to al­low the com­pany time to in­ves­ti­gate the mat­ter and pre­pare a re­sponse.

“The com­pany be­lieves this fluc­tu­a­tion is linked to a re­port en­ti­tled ‘ The Un­be­liev­able Fi­nan­cial Alchemy of Sil­ver­lake Axis’, which was dis­sem­i­nated on­line, on or about Aug 20, and which was sub­se­quently also picked up by and re­ported on in var­i­ous lo­cal news­pa­pers,” Sil­ver­lake group man­ag­ing di­rec­tor Kwong Yong Sin said in a state­ment dated Aug 25.

The com­pany as­sured its cus­tomers and busi­ness part­ners that the com­pany had, since its list­ingin 2003, “al­ways op­er­ated its busi­ness in a trans­par­ent man­ner andin full com­pli­ance with all ap­pli­ca­ble statu­tory and list­ing re­quire­ments”.

In the state­ment, Sil­ver­lake said that the thrust of the re­port con­cerned past re­lated-party trans­ac­tions en­tered into be­tween the group and pri­vate com­pa­nies (Sil­ver­lake Pri­vate En­ti­ties), con­trolled by the com­pany’s con­trol­ling share­holder, Goh Peng Ooi, in par­tic­u­lar, the group’s ac­qui­si­tion of Sil­ver lake Adap­tive Ap­pli­ca­tions & Con­tin­u­ous Im­prove­ment Ser­vices Ltd, go­ing as far back as 2006, as well as its ac­qui­si­tion of the struc­tured ser­vices busi­ness and the QR Group, in 2010, and goes on to al­lude to some al­leged im­pro­pri­ety or wrong­do­ing on the part of the com­pany and or Goh in con­nec­tion with these trans­ac­tions.

The com­pany opined that the au­thors of the re­port may have short po­si­tions in Sil­ver­lake and stood to re­alise gains in the event that the price of the stock de­creases.

“The board of di­rec­tors of the com­pany firstly note that the au­thor(s) of the re­port have cho­sen to con­ceal their iden­tity, whilsthav­ing no qualms about openlyre­veal­ing their real mo­ti­va­tion inis­su­ing the re­port, ie, by ex­presslyad­mit­ting that they ‘may haveshort po­si­tions in Sil­ver­lake AxisLtd and stand to re­alise gains in the event that the price of the stock de­creases’,” Kwong said.

He said Sil­ver­lake’s board, in­clud­ing its in­de­pen­dent di­rec­tors, was unan­i­mously of the view that the ad­verse al­le­ga­tions in the re­port were com­pletely “base­less and with­out merit”.

“The board would also like to re­it­er­ate that, since its list­ing, the com­pany’s fi­nan­cial state­ments and ac­count­ing poli­cies have strictly fol­lowed and ad­hered to the Sin­ga­pore Fi­nan­cial Re­port­ing Stan­dards up to and in­clud­ing the year ended June 30, 2011, and sub­se­quently to the In­ter­na­tional 2 Fi­nan­cial Re­port­ing Stan­dards, and have been sub­ject to an­nual au­dits by rep­utable in­de­pen­dent au­di­tors, whose re­ports have been is­sued with­out any qual­i­fi­ca­tion,” it pointed out.

Con­cur­rently, Sil­ver­lake said it was seek­ing le­gal ad­vice and viewed the mat­ter se­ri­ously. It would be in­ves­ti­gat­ing the source of the re­port and take ac­tions nec­es­sary to pro­tect and de­fend its in­ter­ests.

The com­pany will pro­vide up­dates on this when ap­pro­pri­ate.