UP AND FALLS OF AMCOL

Abstract

Last year, for several months, Amcol has been the talk of the town. The twists and turns in the battle for control of Amcol have made the CPF trustee stock a punter's favourite for more than a year. At its height, Amcol shares hit five dollars before plunging to a pre-suspension price of two dollars and 62 cents in June. Then came the bombshell: Amcol's shares were down to one cent. What actually happened? It is the focus of this exercise to examine how a huge conglomerate like Amcol collapsed in no time. In addition, the causes of the fall have also been looked into. In the process of finding out the causes of the collapse, many irregularities were found in Amcol 's subsidiaries and associated companies. Hence, with the knowledge of the detailed happenings in Amcol several implications can be raised from this incident. Firstly, the collapse of a public-listed company has implication on the capital market efficiency of Singapore. Moreover, since the company is a listed one, the general public's funds are involved. Thus, the collapse of a listed company can bring substantial sufferings to public investors. It is therefore crucial for the government to play a part in governing the listed companies to ensure that the society's welfare is protected. This paper therefore, also looked into the ways in which the government can help in guarding listed companies. However, there are limits to what the government can do. The Amcol saga has taught investors an expensive lesson- trustee stocks are not sure winners. Eventually, investors themselves are responsible for their buying decisions and have to live with the consequence. They should have done their homework by studying the company carefully before making any investments. Investing in the stock market is more than a game of chance. It is a place that pays for those who do some diligent homework.