In the wake of the US$550 million financial fraud at China Aviation Oil (CAO) in December 2004, the Securities Investors Association (Singapore) (SIAS) emerged as a crucial advocate for small shareholders. On December 1, 2004, SIAS president David Gerald received an urgent call at 6 AM regarding CAO's dramatic collapse, which was linked to massive trading losses reported by the company’s CEO, Chen Jiulin. The scandal not only led to CAO's stock price, which had peaked at S$1.89 in March 2004, plummeting but also resulted in losses exceeding US$900 million within a year [42a5a15e].
SIAS criticized CAO for its failure to disclose material information to investors, emphasizing the devastating impact on small shareholders whose investments were effectively wiped out. This incident drew parallels to the infamous Barings Bank collapse in 1995, highlighting the vulnerabilities faced by minority investors in the financial markets [42a5a15e].
Established in 1999, SIAS was formed specifically to protect the interests of minority shareholders. The organization has since played a pivotal role in advocating for corporate governance reforms and ensuring that the voices of small investors are heard. The book 'Boardroom Knockout' chronicles SIAS's efforts in promoting better corporate governance practices [42a5a15e].
As Singapore continues to strengthen its regulatory framework, the work of SIAS remains vital in fostering a more equitable investment environment, ensuring that small shareholders are not left to bear the brunt of corporate mismanagement and fraud [42a5a15e].