SINGAPORE — Shares of Aussino Group plunged by more than half after
the Singapore Exchange rejected its application for a S$70 million (US
$57 million) reverse takeover deal with a company linked to a Burma
tycoon who is on the US sanction list.
Aussino shares fell as much as 58 percent to S$0.071, the lowest
since June last year, after a trading halt was lifted. Nearly 114
million shares were traded, 19 times the average full-day volume over
the past 30 days.
Aussino shares had previously run up after the Singapore bed linen
retailer said last year that it will issue new shares to buy the energy
business of the Max Myanmar Group, headed by Burma tycoon Zaw Zaw.
If the transaction were to succeed, Zaw Zaw would have become the new
controlling shareholder of Aussino. The company was planned to operate
petrol kiosks in Burma, a Southeast Asian nation that has emerged from
decades of isolation.
But Aussino said on Monday that the Singapore Exchange (SGX) is
“unable to proceed with the review of the application as major issues
have not been adequately resolved.”
SGX said Zaw Zaw remained on the US sanction list and there is a lack of clarity on why he was placed on that list.
The tycoon’s related companies had also been alleged to be involved
in human rights violations in connection with forced land acquisition by
the former Burma government, as well as tax investigations by the
country’s tax authorities, SGX said.
The bourse also voiced its concerns about Aussino’s access to the
land critical to its operations after the proposed acquisition, and the
company’s plan to place a significant proportion of its cash with a Zaw
Zaw-owned bank which is on the US sanction list.
“Based on what they announced, it’s very unlikely that they can push
it through. The share price had gone up a lot because of hopes for the
deal, but people are now rushing to exit,” said a trader.
source: The Irrawaddy
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