I would like to commend your reporter Ignatius Low on his reports on the eWorldofSports.com (eWOS) IPO issue in the Straits Times over the last few days and would like to offer my comments on the matter.

It is by now obvious that the lead underwriter, UOB, did not subscribe for the offer/public tranche of the IPO because of the inherent investment merit of eWOS, but because it wanted to give the impression that there is a greater demand for the issue than was actually the case. This is evidenced by the fact that UOB Asset Management has issued a statement that it did not subscribe for the eWOS shares and that UOB itself had confirmed that it was "prepared to surrender its commission to anyone who could help off-load some of the eWOS shares". (Business Times, Aug 15).

Although UOB Asia had made the announcement in the Straits Times as SGX has stated, what seems to be ignored by the SGX is that the many people who only read the ST on its interactive web site would not be able to see UOB Asia's announcement. Besides this announcement would have been overshadowed by the prominently featured article on ST's back page about the 1.3 times over-subscription of the eWOS issue on the same day, Aug 4. There was no mention in the news item that the manager and underwriters of the IPO had also subscribed for the issue. It must be acknowledged that as far as IPOs are concerned there is no known precedence of the manager and underwriters applying for the offer tranche of the IPO.

As for UOB Asia's posting on the SGX's website, I am not able to ascertain from my telephone conversation with the SGX public relations personnel on Aug 11, as to what time the said posting appeared on SGX's website. The said posting, which was similar in appearance and content as UOB Asia's advertisement in ST, appeared as announcement no. 16 on Aug 4 and came in the 'pdf' format, which normally takes several minutes to download. (I am not very familiar with the Internet postings, but feel that, since UOB Asia's announcement was quite short, it should have been posted just like any announcement.) It was most likely that UOB Asia's said posting appeared on SGX's website only after trading of eWOS shares had begun implying that the requirement of timely disclosure, which is the essence proper market discovery process, is absent. Also, as in the case of the advertisement, UOB Asia failed to make "full and transparent disclosure".

It would be apparent that in so far as the advertisement in the Straits Times and the posting on SGX's website are concerned they did not serve their purpose of timely informing the true state of demand for the eWOS shares before trading began. It is also evident that UOB Asia had failed to make "full and transparent disclosure" about the allocation to underwriters, as had been warned by the SGX on Aug 3 (ST, Aug 15).

What is missing from the statements issued by the SGX, as reported in both ST and BT, is the fact that UOB's notice to eWOS, informing the latter that it was a substantial shareholder of eWOS, was given to the company on Aug 7 and this was posted on SGX website as announcement no. 82 on Aug 7, even though UOB had become a substantial shareholder of eWOS on Aug 4. (There were only 84 announcements by listed companies on Aug 7 and UOB's notice as a substantial shareholder of eWOS was most likely to have been posted on SGX website very late in the day.) The question UOB should answer is: Why did UOB informed eWOS only on the 4th day of it becoming a substantial shareholder of the company when, I believe, UOB is required, under the Company's Act, to inform within 2 days. In any case, as SGX's first statement shows, UOB had become aware that it would be a substantial shareholder of eWOS on Aug 3, if not earlier, as the application for the shares closed at 12 noon on Aug 2, and that it should have informed the company, and the company to inform SGX, of its shareholding position much earlier.

Also on Aug 7, under announcement no. 81 on SGX website announcements column, eWOS informed SGX that its non-executive Chairman Mr Keith David Budge sold his 100,00 shares on Aug 4 and that Mr Budge had duly informed eWOS of his share transaction on the same day. Why did eWOS not report Mr Budge's transaction on Aug 4?

SGX has concluded that in its view, UOB Asia's announcement of the subscription rate "without express qualification" was in its view, "misleading".

. The question I think the authorities should look into is whether UOB Asia, as the lead underwriter, and UOB as the manager of the eWOS have misled the investing public to deal in the securities of eWOS under the Securities Industry Act, in view of its not disclosing the "true and transparent " disclosure as warned by the SGX.

I am not a lawyer, but in "Securities Regulations And Bye-laws of SES, A practical guide to Paper I of Dealer's Representatives' Examination" by the Institute of Banking and Finance in the MAS Building, Sections 99, 100 and 102 of the Act mentioned about make "misleading" statements. In this regard, the authorities should investigate whether UOB's "action amounted to creating a false market for eWOS shares" as BT (Aug 11) reported "many brokers who believe" this to be the case.

I believe the issue should not just be seen narrowly that UOB Asia had made announcements in the Aug 4 issue of the Straits Times and SGX website. It is the whole conduct of UOB Asia and its parent, UOB, in this IPO that has to be looked into to determine whether they have deliberately misled the investing public.