UOB found ‘grossly negligent’ over Stamford Land rights issue advice, to pay S$1.9 million
The High Court says the bank failed to exercise reasonable skill and care in advising the hospitality company
The High Court has ruled that Singaporean bank UOB was "grossly negligent" in its advice to hospitality company Stamford Land in a 2021 rights issue. UOB must pay Stamford Land S$1.9 million in damages, covering the company's legal costs incurred during investigations and disciplinary proceedings by the Singapore Exchange Regulation (SGX RegCo).
The dispute centered on the allocation of excess shares from Stamford Land's rights issue, with 106.1 million shares available but only about 46 million allocated to non-director, non-controlling shareholders. SGX RegCo argued that Stamford Land had breached Mainboard Rule 877(10), which requires directors and substantial shareholders to rank last in priority when excess rights shares are allocated.
The court found UOB's interpretation of the rule to be incorrect and deemed its conduct as gross negligence, as the bank failed to seek clarification or check previous rights issues for precedents.
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