THE Singapore Exchange regulation (SGX RegCo) on Tuesday (Aug 29) issued a notice of compliance to mainboard-listed Rex International : 5WH 0% over the acquisition of Moroxite T, a medtech startup incorporated in Sweden. 

On Dec 30, 2022, Rex International’s wholly-owned subsidiary Moroxite Holding entered into a conditional share purchase agreement with Moroxite AB for the purchase of the entire issued share capital of Moroxite T. The deal comprised 1,000 shares at a nominal consideration of one Swedish krona (S$0.124).

Moroxite AB is defined as an associate of an “interested person” under Chapter 9 of the listing rules, and the acquisition in question is an “interested person transaction” which requires shareholders’ approval. 

Subsequently, on Jul 28, 2023, Rex International substantially revised the share purchase agreement with an addendum such that shareholders’ approval would no longer be required. 

However, the transfer of the Moroxite T’s shares from Moroxite AB to Moroxite Holding took place on Jan 31, 2023. At that point, the share purchase agreement had yet to be modified and the acquisition was still conditional upon shareholders’ approval. Based on the initial terms of the agreement, the acquisition would not be considered completed.

“While the revised acquisition no longer requires shareholders’ approval, the company purportedly completed the transfer of shares in Moroxite T from Moroxite AB to Moroxite Holding and injected the capital contribution at the point in time when the terms of the original agreement prevailed,” said SGX RegCo. 

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SGX RegCo further highlighted that the due diligence conducted by Rex International “only relates to due enquiry and discussion with, and taking into account, the business case provided by the management team of Moroxite T”. 

Therefore, SGX RegCo has issued a requirement for Rex International to appoint an independent professional by Sep 29, 2023. 

The independent professional will review if Rex International has conducted proper due diligence in relation to the acquisition, ascertain whether the acquisition was complete with reference to the original share purchase agreement, and review the adequacy of the group’s internal control relating to acquisitions and interested person transactions. 

The independent reviewer will report its findings directly to SGX RegCo.

Shares of Rex International were trading at S$0.151, up S$0.002 or 1.3 per cent as at 9.11 am on Wednesday.