Stefanie Yuen Thio commented in a news story published by the Business Times on 17 January 2019 on market watchers reacting to a study led by corporate governance advocate Associate Professor Mak Yuen Teen. The report questioned the relevance of the Catalist board.

Stefanie Yuen Thio said the most “racy” allegation by Prof Mak was that of “rules arbitrage” by companies transferring to Catalist. She added: “In my experience, I have not seen Mainboard companies transferring to the Catalist board to take advantage of the more lax rules. In the cases I have seen, the Mainboard company may have fallen on hard times – whether because of unfavourable market conditions or because its business has not done well. Transferring to the Catalist board will give them time to rehabilitate without the tougher restrictions. The greater flexibility on Catalist will give more breathing room to turn the company around.”

Ms Thio said the Catalist board should be seen as a market where companies have the flexibility to grow – whether in the infancy of their business development, or when they are turning around from a bad patch.

“So long as the rules are rigorous to root out mismanagement and wrongful activity, I think we should not be so quick to condemn companies for low market capitalisation or unprofitability, neither of which is a corporate sin.”

The story may be found here (BT Paywall).