NatWest takes action against brokerages

NatWest Securities Asia has launched legal action against six brokerages for failing to sub-underwrite rights shares issued by Logic International Holdings during the stock market's dramatic fall last October.

NatWest, now a unit of ICEA Finance Holdings which was formed by Bank of East Asia and Industrial and Commercial Bank of China, was underwriter to the rights issue. It is suing for breach of contract and claiming $36.54 million plus damages and interest.

Office furniture supplier Logic originally launched a $191 million rights share sale last October but NatWest was later forced to cut the price 40 per cent, to 70 cents, to stimulate demand.

Despite the price revision, the issue was only 46.71 per cent subscribed.

NatWest claimed the defendants - Lippo Securities, Tai Fook Securities, CA Pacific Capital, Eastgate Investments, Asia Investment Management Nominees and Kingsway SW Securities - failed to take up the rights shares not subscribed by shareholders.

The brokerages were alleged to have failed to subscribe a total of 50 million rights shares.