Politics · Singapore Bureau
High Court awards Stamford Land $1.9m in UOB rights issue dispute
The Singapore High Court has ruled that United Overseas Bank was grossly negligent in handling a rights issue, finding the bank's interpretation of SGX guidelines to be legally unsound despite its creative approach.
LSN Singapore ·
Stamford Land Corporation has secured a $1.9 million judgment against United Overseas Bank following a High Court decision that found the bank liable for negligence in administering a share rights issue.
The court determined that UOB's handling of excess share allocations breached its duty of care to the property developer. While acknowledging the bank's interpretation of Singapore Exchange guidelines as inventive, the judge ruled the approach lacked legal foundation and deviated from proper procedure.
The dispute centred on how UOB managed excess shares during the rights issue process. Stamford Land contended that the bank's method of allocation was inconsistent with SGX directives and caused the company financial loss through improper share distribution.
The judgment underscores the responsibilities financial institutions bear when administering corporate actions. Banks acting as share registrars or rights issue managers must ensure their interpretations of regulatory guidance align with legal requirements, regardless of any business rationale behind alternative approaches.
The decision may have implications for how other financial institutions in Singapore handle similar corporate actions and their interpretation of exchange rulings.