Why did ecoWise shares surge 36%?
Singapore-listed environmental solutions player ecoWise was queried about ‘unusual’ trading activity, following its shareholders’ request to appoint new directors.
- ecoWise Holdings (SGX: 5CT) share price hits S$0.053 per share on heavy volume
- The renewable energy firm halted trading in its shares on Friday morning
- Three shareholders are seeking to remove an existing director and name three new directors
- In response to SGX’s query, ecoWise said it is verifying the validity of the EGM request
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ecoWise’s stock sees active trading before halt
Shares of Singapore-based ecoWise Holdings - which focuses on resource recovery, renewable energy, and integrated environmental solutions - last traded at S$0.053 last Friday (28 May 2021), climbing 35.9% day-on-day, before it requested a trading halt at 11:15 SGT.
By then, 54.8 million shares had changed hands in the morning. That alone exceeded the monthly average of the stock’s cumulative trading volume over the last three months, which stood at 50.6 million shares, according to the Singapore Exchange’s (SGX) website.
The trading halt came about an hour after the SGX’s regulatory arm issued a query concerning ecoWise’s heavy share volume.
The Catalist-listed stock was the third most actively traded by volume on the Singapore stock exchange at the end of Friday’s session.
The group’s businesses include processing food waste into animal feed, burning wood waste to generate electricity, recycling rubber tyres and copper slag, and providing consultancy services on process design.
Regulator queries heavy volume in ecoWise shares
On Friday morning at 10:14 SGT, SGX flagged ‘unusual volume movements’ in ecoWise shares.
In a response filed on Sunday (30 May 2021) night, ecoWise said it was not aware of any information not previously announced that might explain the trading activity.
However, it noted its announcement earlier this month about having received a requisition from three shareholders to convene an extraordinary general meeting (EGM).
ecoWise said that as of Sunday, its board is still seeking legal advice on the validity of the requisition notice.
‘As the validity of the requisition notice is being verified, the directors have not reached any conclusive views. Save for the above, the company is not aware of any other possible explanation for the trading,’ ecoWise added.
Three shareholders propose to remove ecoWise director
On 21 May 2021, ecoWise disclosed that three shareholders - Tan Swee Boon, Tan Jin Beng Winston, and Sunny Ong Keng Hua - requested to convene an EGM to propose the removal of an existing board member, as well as to appoint three additional directors.
The company did not name the existing director and the three proposed new board members in that filing, and did not provide further details of the notice.
ecoWise said it was verifying the shareholdings of each of the requisitioning members, and seeking legal advice on whether the requisition notice satisfies the requirements of Section 176 of Singapore’s Companies Act.
Among other things, Section 176 states that the requisitioning members should hold at least 10% of the company’s shares.
ecoWise noted that its directors will consider the proposed board changes ‘carefully’ only after the validity of the notice has been verified and confirmed.
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