Anthony Soh's offer for Jade Tech hits a snag

Ownership of 295m shares pledged to failed Aussie broker unclear
By CHEW XIANG

JADE Technologies group president Anthony Soh's takeover bid for the company has run into a snag after Dr Soh said yesterday in a letter to Jade's board he could not confirm he had sufficient resources to go through with the offer. He also said that OCBC has ceased to be the financial adviser for the offer.

Dr Soh explained that his ownership of a block of shares, representing about 30.5 per cent of Jade, has become unclear.

On Tuesday he revealed that to secure financing he had pledged that block of shares last October to Australian stockbroker Opes Prime. Opes went into receivership last Thursday after directors found irregularities in the firm's accounts. Under the terms of the agreement with Opes, ownership of those shares may now have passed to Opes and on to its creditors.

In yesterday's letter, Dr Soh said that assuming his shareholdings were stated at just 16.06 per cent of the company, rather than about 46 per cent as previously thought, then he could 'not confirm as at 2 April 2008 that sufficient resources are available ... to satisfy full acceptances of the offer'.

Last month, Dr Soh through his investment vehicle Asia Pacific Links (APL) had offered 22.5 cents a share to acquire all outstanding shares. The offer document stated then that he controlled about 46 per cent of the company's shares.

Jade had called a trading halt yesterday for the release of an earlier letter dated Apr 1 from Dr Soh stating that he had entered into a Global Master Securities Lending Agreement (SLA) with Opes dated Oct 12, 2007, pledging 295,450,000 shares in Jade, or about 30.47 per cent of its total share capital, in order to secure financing from Opes.

Although news of Opes's collapse broke last week, in his letter dated Apr 1 to Jade's board of directors, Dr Soh said he 'did not realise until 1 April 2008 that the SLA had operated as a transfer of title and was under the impression all along that the said shares were pledged'.

He added that he was 'under the impression', due to 'representations made by the CEO of Opes, Laurie Emini, that the ownership of the said shares remained with the offeror (APL) at all times and that at any time the said shares could be redeemed by the offeror'.

He added that a circular sent out on Monday by receivers and managers appointed by a creditor of Opes told clients that 'where securities are 'lent' to Opes, absolute title to the securities passes from the lender to Opes'.

Dr Soh said 'a review of the terms of the SLA is consistent with the position as set out' in that circular, meaning that ownership may have passed to Opes.

An analyst said that if this is the case the offer may not become unconditional as Dr Soh may not be able to secure more than 50 per cent of the company. 'In this case, they may have to return the acceptances,' he said. Dr Soh said yesterday that as at Apr 1, he had received acceptances representing 3.06 per cent of Jade's share capital.

Traded volume in Jade has spiked recently. Last Wednesday, about 1.46 million shares changed hands. This rose to 15.9 million shares on Friday and hit 196 million on Tuesday before trading was halted. Its share price closed at 22 cents.

According to Australian media reports, clients of Opes have become unsecured creditors because the securities lending agreements they signed transfered away legal title to their shares.

Opes lent clients money on the securities, mostly small cap stocks, financing its loans by borrowing from banks at a lower cost. The firm reportedly owed A$650 million to ANZ and A$350 million to investment bank Merrill Lynch.