Best World International, known for its direct selling business of beauty and health products, has applied for its shares to resume trading on the Singapore Exchange.

 

The company&rsquo s shares have been suspended since 2019 after the company first came under attack by short seller Bonitas Research, and following which, questions were raised over its business model in China.

 

The company, on Oct 2 said it has submitted a trading resumption proposal to the exchange.

 

The possibility of resumption of trading was mooted by the company in an update on July 9.

 

Back then, the company said that it has on June 16 received an &ldquo improved audit opinion&rdquo from its independent auditor for its earnings ended Dec 2021.

 

&ldquo As a result of the improved audit opinion, the company is of the view that there is clarity on the financial statements of the company,&rdquo noted Best World then.

 

In addition, with the company has implemented recommendations made by the independent accountant in the independent review report.

 

Also, citing the legal opinions and updates its lawyers, the &ldquo noncompliance risks of the group&rsquo s business model in China with regards to direct selling&rdquo as being &ldquo remote&rdquo .

 

As such, Best World believes that it has &ldquo satisfactorily addressed&rdquo concerns raised by SGX RegCo.

 

On Aug 11, the company reported earnings of $38.9 million the three months ended June, down 1.2% y-o-y. Revenue in the same period was down 13% y-o-y to $130.5 million.

BEAUTY products distributor Best World International will begin to prepare the proposal to resume trading of its shares for submission to bourse regulator Singapore Exchange Regulation (SGX RegCo), the company said in a bourse filing on Saturday (Jul 9). 

 

In an update to shareholders on the &ldquo future plans&rdquo of the company, Best World said that it has completed 2 equal access off-market   share buyback exercises since its update in November last year.

 

Both of these exercises were over-subscribed, and achieved the objective of providing Best World shareholders with a &ldquo certain level of liquidity and cash value&rdquo for their shares, the company said. 

 

These 2 exercises were part of the group&rsquo s efforts to provide shareholders with some liquidity or cash value for their shares as an interim measure while the stock remained suspended from trading on the Singapore Exchange, and while the company explored options for a delisting.

 

On Jun 16, Best World had also received an improved audit opinion from its independent auditor for its audited financial results for the fiscal year ended Dec 31, 2021. Best World is now of the view that there is &ldquo clarity&rdquo on the company&rsquo s financial statements. 

 

The company also reckons that the concerns raised by SGX RegCo in its regulatory announcement on Jul 23, 2020, could be &ldquo satisfactorily addressed&rdquo due to the implementation of all recommendations made by the independent accountant in the company&rsquo s independent review report, as well as the legal opinions and updates from Merits and Tree (Beijing) Law Office (M& T) and Dentons Beijing Office highlighting that   non-compliance risks of the group&rsquo s business model in China with regard to direct selling and ChuanXiao laws as being remote. 

 

In a separate filing on Jul 8, an excerpt of the independent auditor&rsquo s report said that Best World believes the non-compliance risk of the group&rsquo s business model in China with regard to the direct selling and ChuanXiao laws continues to be remote. The possibility of the China authority commissioning any penalty on the group is also remote.

 

Accordingly, Best World does not consider it necessary to disclose any contingent liability pertaining to any penalty relating to potential non-compliance with the direct selling and ChuanXiao laws in China.

 

The group will, however, continue to assess the risk of any penalty imposed by the China authority relating to potential non-compliance with the direct selling and ChuanXiao laws in China, and will make the necessary disclosures at the end of the relevant reporting period if the risks of potential non-compliance cease to be remote. 

 

Best World said it will provide further updates to shareholders in the event of any material development regarding the trading resumption proposal.