On 17 April 2002, the Company in response to a query from the Singapore Exchange on the reasons for a substantial increase in the price and trading volume of the Company's shares on that day (the "Trading Increase"), replied on MASNET (the "Reply") that neither the Company nor its directors were aware of any reason for the Trading Increase.
The Exchange has requested the Company to explain whether the Reply made on 17 April 2002 is appropriate and not misleading in the light of the Company's announcement on 29 April 2002 as regards the following matters (the "Subsequent Developments"):-
1. the Company's first quarter results for the current financial year;
2. the Company's joint venture in Taiwan;
3. private placement of 10 million new ordinary shares (the "Private Placement").
The Company would like to affirm that the Reply made on 17 April 2002 was appropriate and not misleading as the Subsequent Developments were only crystallized by the executive management during the week of 22 April 2002. In compliance with the corporate governance policy guidelines of the Company's audit committee, the Company's executive management had to seek the prior approval of its audit committee before any announcement on any joint venture, financial results or fund raising exercise could be released by the Company. The Company's audit committee held a meeting on the Subsequent Developments in the morning of 27 April 2002. The audit committee queried and probed the management on each of the Subsequent Developments and carefully deliberated on the proposed announcements on the Subsequent Developments. The audit committee had to be satisfied with the merits of each of the Subsequent Developments and the quality of the public disclosures to be made in respect thereof before the Board of Directors had the authority to complete and announce these transactions.
The Board of Directors in consultations with the audit committee finalized its decisions on the Subsequent Developments after the audit committee's review on 27 April 2002. The Board made a decision to suspend trading of the Company's shares with effect from 12.30pm on 29 April 2002 to (i) enable the Company to price the placement shares with reference to the traded price of the Company's shares in the morning of 29 April 2002 and (ii) for the Company to finalize the legal documents and MASNET announcements in respect of the Private Placement whilst minimizing the risk of any leakage of unannounced price sensitive information.
The Company has at all times exercised due care in ensuring that all price sensitive information is publicly disclosed at the soonest possible time, and that radio silence confidentiality is strictly observed in respect of any unannounced material information which is not ready for public disclosure. There was no unusual movement in the trading volume or price in respect of the Company's shares during the period of 22 April 2002 to 29 April 2002 when the Subsequent Developments were being finalized by the Board of Directors and the audit committee.