atans1

OCBC: Close down the investment bank?

In Banks on 13/04/2010 at 5:22 am

Anthony Soh is suing OCBC Bank. He claims in court that  said serious breaches on the part of OCBC Bank were behind his failed takeover bid for Singapore-listed Jade Technologies in April 2008 because  the bank failed in its duty to advise him.

He says OCBC did not advise that a financial resources confirmation letter he had provided was insufficient for the purpose, and also did not verify the authenticity of the letter until it was too late.

The bank also did not review the terms of a share lending agreement that he had signed with an Oz broker. Millions of Jade shares lent to the brokerage were seized by its creditors when it failed and Dr Soh was forced to withdraw the offer because of his diminished holdings.

If he can prove his allegations, it would be interesting to see OCBC’s defence. What he claims OCBC failed to do would be par for the course stuff for M&A experts, or so I’ve been told.

The failed and clownish bid resulted in  the Securities Industry Council, which later investigated the issue, censured Dr Soh and OCBC for breaches of the takeover code.

Dr Soh was banned from making any takeover offers in Singapore or sitting on the board of any Singapore-listed company for five years, while OCBC and an Allen & Gledhill lawyer voluntarily abstained from takeover work for six months.

DBS for all my rants abt its FT policy trumping S’pore’s meritocratic policy shows that the FTs didn’t ruin the investment bank. Unlike OCBC’s and UOB’s investment banks, DBS’s investment bank has not caused any problems for DBS. UOB’s investment bank was caught out when it tried avoid an undersubcription of an IPO. Prosecutions and convictions followed.

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