appConfigEntityId

bodyType

customContents

entityId

entityUuid

articlePageQuery

filter

article

articleBaseAdvertisingInfoArticle

articleListArticle

articleSeoArticle

hooksArticleAcknowledgementGateOverlayArticle

hooksTrackPageViewArticle

hooksContentInterestArticle

articleLinkingDataContent

hooksAmpRedirectArticle

articleSchemaContent

hooksArticlePageAdvertisementConfigArticle

liveArticle

appConfig

advertZone

sentiment

contentLock

topics

types

sections

paywallTypes

createdDate

publishedDate

sponsorType

urlAlias

moreOnThisArticles

sectionsV2

commentCount

authorLocations

authors

corrections

displaySlideShow

multimediaEmbed

printHeadline

seriesContainer

articleSpeeches

socialHeadline

headline

images

flag

firstTopic

glossary

flattenTypeIds

image

relatedLinks

relatedNewsletters

__typename

sponsor

pdfFiles

seriesReverseOrder

series

disableOffPlatformContent

published

updatedDate

summary

subHeadline

body

keywords

readingTime

customTimezone

liveContents

json

SCMP Reporter

The stock exchange is to examine whether Pioneer Industries International (Holdings) has breached listing rules by allegedly holding an illegal stake in a Thai bank and failing to declare it.

An exchange spokesman confirmed officials were examining the case but stopped short of saying it was a formal investigation.

 He said the focus would be on whether price-sensitive information had been disseminated correctly.

The exchange was alerted to the case after a fractious general meeting on Tuesday in which Pioneer's 20 per cent shareholder, Regent Pacific, alleged Pioneer chairman Anthony Gaw had passed on price-sensitive information to Regent without informing other shareholders.

 Regent cited a telephone conversation between Mr Gaw and Regent chairman Peter Everington in which it claimed Mr Gaw had said a 3.77 per cent stake in Bangkok Bank had not been approved by Thailand's investment board.

 Regent immediately passed the information on to the exchange and the Securities and Futures Commission.

 The probe could spell disaster for Pioneer as the Bangkok Bank stake - considered the jewel in Pioneer's crown - is worth twice the company's entire market capitalisation of about $1.9 billion.

 The stock exchange may find Pioneer created a false market by failing to inform shareholders of the status of the Bangkok Bank stake, in contravention of its listing rules.

 Regent is seeking a way to realise the value of the Bangkok Bank stake and on Tuesday attempted to appoint 13 new directors to the company's board. The two opposing sides have had stormy encounters in general meetings twice in the past 10 days, with Regent being defeated on both occasions.

 Both sides will again square off at the forthcoming annual general meeting on September 30 in which, subject to shareholders' approval, the issued share capital of Pioneer will be doubled by the creation of 500 million new shares.

 Regent suspects that with the newly adopted share-option scheme and the mandate of the board to issue 20 per cent of new shares, Pioneer's issued share capital will be enlarged substantially soon.

 'It is legitimate to fear that the company is in a massive diluting mood,' Ascanio Martinotti, Regent director of corporate finance, said.

 The recent announcement by Pioneer of a possible rights issue to fund investments attested to its fear.

 'We believe the company is over-capitalised and there is no need for more capital,' he said.

 On the contrary, he suggested the company buy back its shares. By reducing the number of shares in circulation, the net asset value (NAV) would be raised.

 When a share price moves up to reflect a higher NAV, the discount between the NAV and share price is reduced.

IN THE SPOTLIGHT Unofficial probe to focus on issue of price sensitive information A negative result could cripple Pioneer Regent moving to realise value of Bangkok Bank stake 



Exchange looks into Pioneer's Thai bank stake