SINGAPORE — Investor rights advocate Securities Investors Association Singapore (SIAS) has questioned Swiber’s decision to liquidate the company instead of putting it into judicial management, which would give the oilfield services firm a chance to reorganise its affairs and achieve a more advantageous realisation of the company’s assets.

“SIAS questions why the company has chosen to liquidate rather than judicial management, which potentially could see some light at the end for shareholders. With a liquidation process, it’s almost the end,” said SIAS president and CEO David Gerald.

“At the present moment, the only possibility for shareholders is to wait for the liquidation process to be completed and see what comes out of it,” he added.

Swiber shocked investors on Thursday (July 28) when it announced it had filed an application to wind up the company, after facing letters of demand from creditors for about US$25.9 million (S$35 million). The winding-up application will be heard on Aug 19.

The High Court has appointed Mr Cameron Lindsay Duncan and Ms Muk Siew Peng, care of KordaMentha, as provisional liquidators.

For Swiber shareholders, this means that they will be likely be the last group to get paid, as the proceeds of liquidation will first be used to pay off creditors and bond holders.

“As the company has been put into liquidation, no lawsuits can be filed against the company. Nevertheless, should the liquidators uncover any breach of duty by directors, shareholders can potentially seek redress from the directors. Of course, the question on everyone’s mind is: Why did the directors resign when they are most needed to help steer the company?” Mr Gerald said.

Along with its announcement that it was winding up and liquidating the company, Swiber also released a flurry of statements announcing that executive director and vice-chairman Francis Wong, executive director and group CFO Leonard Tay and executive director Nitish Gupta had resigned to explore new opportunities.

Their resignations make the current situation even hazier for investors, and also raise doubts about the company’s corporate governance, said Ms Margaret Yang, market analyst at CMC Markets Singapore.

Swiber’s troubles have already hurt those with exposure to the company.

Among the first big casualties is Singapore’s top bank, DBS, which said in a regulatory filing with the Singapore Exchange (SGX) on Thursday that it will incur a net charge of S$150 million on its S$700 million exposure to Swiber, comprising loans, bonds and off-balance sheet items. Its shares fell 2.96 per cent to S$15.41 on Friday (July 29).

UOB, who also confirmed that it has “some exposure” to Swiber, closed down 2.67 per cent at S$18.20.

The benchmark Straits Times Index fell 1.7 per cent to 2,868.69.

Shares of other oil-and-gas counters were also battered. Ezra Holdings fell 3.85 per cent to close at S$0.05, while Ezion Holdings plunged 4.76 per cent to S$0.30. Sembcorp Marine fell 1.7 per cent to S$1.41 and Keppel Corp closed down 1.3 per cent to S$5.25. Vallianz Holdings, whose controlling shareholder is Swiber, rose 4.76 per cent to S$0.022, recouping a 40 per cent plunge on Thursday.