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TANG
C.K. Tang Limited is a Singapore-based company founded by Tang Choon Keng in 1932. The
company is in the business of departmental store retailing and general merchandising. Since
1958, the company has been operating at its flagship building, Tangs Plaza, along Orchard Road.
C.K. Tang is a company characterized by the presence of a major controlling shareholder. For
example, in June 2003, then CEO-Chairman Tang Wee Sung, the second son of the founder,
owned 69.95 per cent of the companys shares2.
In 1975, C.K. Tang was listed on the then Singapore Stock Exchange, which later became the
Singapore Exchange (SGX). However, since 2003, the Tang family had been trying to delist and
privatize the company4. After two failed attempts, the Tang family finally succeeded and the
company was delisted on 24 August 20095.
In 2011, C.K. Tang made an offer to about 500 minority shareholders who had held on to the
shares of the delisted company. This offer represented a 15 per cent premium over its fair value
and well above the price offered to other shareholders for the delisting in 2009. However, some
of these minority shareholders were still unwilling to take up the share buyback offer, and were
holding out for a better offer6.
BOARD OF DIRECTORS
During the third and successful privatization attempt, the board of C.K. Tang was chaired by
Ernest Seow, a former PricewaterhouseCoopers (PwC) partner. Apart from Seow, there were
three other directors with experience in accounting, business management and the retail industry.
Among the four directors, three of them were serving as non-executive independent directors.
During the companys history, there was at least one Tang family member on the board7.
However, in 2008, Tang Wee Sung, CEO and the majority shareholder of the company since
19878, stepped down from the board, after he was alleged to be involved in an illegal organ
trading scandal.
management of the Group. This includes reviewing the Groups performance, approval of
corporate strategies and promoting high standards of corporate governance. The board delegated
some of its functions to the board committees, namely the audit committee, nominating
committee and remuneration committee.
remaining shareholders were offered S$0.83 per share20, which represented a 22 per cent
premium over the companys last traded share price of S$0.68 prior to the offer, and a 21 per cent
discount to the firms net asset per share price of S$1.05 as of 31 December 200821. The board
recommended that the minority shareholders accept the offer, based on an evaluation of the offer
provided by the independent financial adviser PwC22. At an Extraordinary General Meeting
(EGM) held on 31 July 2009, minority shareholders questioned if the offer was reasonable, given
that the shares had closed at a price above the offer at that point in time. Nonetheless, the board
retained its recommendation, saying that market prices typically varied23. This was despite
earlier statements by the Tangs saying that the privatization offer was to allow shareholders to
monetize the value of their investments at a premium over its historical trading prices24.
Shareholders also reproached the directors for failing to clarify with the Tangs about their
redevelopment plans for Tangs Plaza after its privatization. They expressed disappointment with
the independent directors, saying that they had insufficiently analyzed the issue.
and shown 31. During all three privatization attempts by the Tang brothers, the offer price
reflected an undervaluation of Tangs Plaza32. The board stood by its stand of valuing the
property according to its existing use, as there was no intention of deviating from it. One
investor had brought up the fact that in C.K. Tangs 2007 annual report, a property valuation
report had taken into consideration the redevelopment potential of Tangs Plaza. In response, the
boards legal adviser, Yeo Wee Kiong, said it was not legally required to put a redevelopment
valuation on the report33.
exercise was to reduce administrative burdens. Additionally, the company reaffirmed that there
are no plans for the redevelopment of Tangs Plaza, and the buyout had no hidden agenda.