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The Business Times, 29 Jul 2020: Directors should be required to say if they will take part in cash calls
By Tan Chong Huat
When pandemic-hit Singapore Airlines undertook its massive S$15 billion fundraising exercise, many were surprised that only six of the airlines’ nine directors took up their rights shares and only one took up the bonds.
In this opinion article, Senior Partner Tan Chong Huat argues that listed company directors, having made certain recommendations to shareholders, should disclose their intention (as shareholders) to subscribe or not subscribe in a fundraising. The disclosure of intention will signal the likelihood of success of the fundraising and enable shareholders to make an informed decision.
The article also discusses existing regulations in Singapore, draws on examples from the London Stock Exchange and considers the potential pressure on directors to participate in the fundraising.