Best World drops defamation lawsuit against Bonitas Research
Best World's founders want to get back to managing the company.
The writ of summons for Best World International's defamation proceedings against short-seller Bonitas Research has expired.
Best World and its founders - Dora Hoan and Doreen Tan - decided not to renew the writ, and thus will not continue with the lawsuit. This is so they can "focus management time and resources on the measures necessary for the company to resume trading and the growth of the group's business", Best World said in a filing early on Friday.
The mainboard-listed skincare products firm, Ms Hoan and Ms Tan commenced defamation proceedings in the High Court of Singapore against Bonitas and its founder and chief executive Matthew Wiechert in May 2019.
The month before that, Bonitas had published a 28-page report questioning the authenticity and legality of Best World's profits.
In response, the listed firm said the following month that the report contained false and defamatory allegations "intended to undermine the reputations" of the group and its senior management, cause a loss of confidence in the group and inflict damage on its share price to "financially benefit Bonitas".
It added then that the professional short-seller had openly stated in its report that it would profit from the decline in Best World's stock price.
Mr Wiechert also said last May that his firm was "ready with an exhaustive list of internal discovery document requests" for Best World, which Bonitas believes would corroborate publicly available findings. Days after the Bonitas report last April, the Singapore Exchange's regulatory arm (SGX RegCo) ordered a review of Best World's China business to address all matters raised by Bonitas.
Trading in Best World's shares has been suspended since May 2019. In July 2020, SGX RegCo said the suspension will remain indefinitely until the firm addresses concerns over accounting practices that have cast doubt on its actual financial position.
SGX RegCo's statement came after an independent review of the company's premium skincare distribution business in China uncovered questionable deposits into the personal bank accounts of various individuals and other potential breaches of the Singapore Companies Act.
The findings by PricewaterhouseCoopers Advisory Services (PwC) had also resulted in auditor Ernst & Young issuing a disclaimer of opinion on Best World's financial statements for FY2018.
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