Friday 22 April 2016

SIAS to take legal action (2)

Interesting follow up article in the Business Times (Singapore) by Michelle Quah:

"Are class actions good for investors and Singapore markets?"

My answer on that question is simply "Yes!".

The share markets (both in Singapore and Malaysia) are too much in favour of the majority shareholders, class actions will help to bring more balance to the equation.

In my home country (The Netherlands) the VEB ("Association of share holders", a not-for-profit organisation) has won many class action suits on behalf of the minority shareholders against large (mostly) Dutch companies, some of them in the top 500 of the world.

Here are some of the current actions (in Dutch):
  • Volkswagen
  • Fortis
  • Ahold
  • BP

And here of the past, succesful examples:
  • KPNQWest
  • Shell
  • Unilever
  • Fokker
  • Philips

Some of the reasons for the suits:
  • Misrepresentation
  • Unfair treatment of a certain class of shares versus another class
  • Unfair valuation at a merger or acquisition
  • Sensitive information was given too late or was leaked
  • Mismanagement and/or fraud

To participate one only needs to become member of the VEB, which costs 60 Euro per year and one will receive (beside the possibility to participate in class action suits) a few more benefits, like a monthly magazine, expert advice, etc. It is therefore no surprise that the VEB has 45.000 members (on a population of about 17 million).

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