Oxley: Committed to providing shareholders, investors with regular disclosures: Letter to the Editor
The need to add up all lawsuits to determine materiality for disclosure is inconsistent with established principles of accounting.
I refer to The Business Times' article written by Tay Peck Gek titled "Multiple lawsuits added up can be material so why does Oxley Holdings not disclose them?" published on Nov 10, 2020.
Your writer has taken the liberty to suggest that Oxley Holdings may not be in compliance with its disclosure obligations as a listed company.
We would like to specifically address a few inaccuracies in the said article:
1. The title of the article suggests that there is a need to add up all lawsuits to determine materiality for disclosure. This assumption is inconsistent with established principles of accounting and is misleading to readers. Based on the time period accounting principle, the financial impact of a matter is determined in the specific financial year the event happened.
Even disregarding the time period accounting principle, it is fundamentally incorrect to add up the impact of all the lawsuits because Oxley Group had already made payments in certain lawsuits, while the other lawsuits relate to claims against the group or claims made by the group against external parties.
The impact on the group's financial position from each lawsuit varies depending on the nature of the transaction and cannot be viewed simplistically. We further also note that even your writer noted in the article that "each case on its own may not be significant enough to disclose".
2. The 10th paragraph of the article seems to suggest that the High Court had, in its grounds of decision dated Nov 5, 2020 or otherwise, ordered Oxley Consortium Pte Ltd ("Oxley Consortium") to make a refund to Geetex Enterprises Singapore (Pte) Ltd ("Geetex"). Please note that it was the arbitral tribunal that had ordered Oxley Consortium Pte Ltd to make a refund to Geetex in the year 2018, and not the High Court.
Oxley Consortium is the plaintiff in this High Court matter, in which it is seeking to appeal against an arbitration award. The refund amount had already been paid out around the time that the arbitration award was issued, and Oxley Consortium only faces a cashflow positive if it wins the case - it does not stand to lose any material amount even if it loses the appeal.
We would like to reiterate that Oxley Holdings has always complied with the SGX Listing Rules and all disclosures required under the SGX Listing Rules have been made. The management is committed to provide shareholders and investors with regular disclosures via SGX announcements, investors' seminars and roadshows, results briefings and media interviews.
Source: Business Times © Singapore Press Holdings Ltd. Permission required for reproduction.