High Capital Ratios and a Concentrated Position in Haw Par Shares: A Coincidence or Not?

UOI’s High Capital Ratios and Concentrated Position in Haw Par Shares

United Overseas Insurance (UOI) has a significant stake in Haw Par Corporation, with a 17.4 million-share holding. This concentration of ownership is not surprising, given the insurer’s high capital ratios.

Sias’ Concerns About Great Eastern’s Response

The Securities Investors Association (Singapore), or Sias, has expressed concerns about Great Eastern’s response to a proposal made by former remisier Ong Chin Woo to address the undervaluation of its shares. Sias believes that Great Eastern’s response was "somewhat legalistic" and that it appeared to "sidestep the substantive concerns raised".

A Different Approach: UOI’s Response to Ong’s Proposals

In contrast, UOI took a more cordial tone when Ong wrote on February 28, asking for two resolutions to be tabled at its upcoming Annual General Meeting (AGM). Ong’s first resolution is that UOI distribute the nearly 4.3 million Haw Par Corporation shares it holds to its shareholders. His second resolution is that UOI appoint a financial adviser to evaluate strategic options to maximize shareholder value.

UOI’s Board and Management Welcomes Feedback

On March 3, UOI acknowledged Ong’s proposed resolutions and welcomed constructive suggestions from its shareholders. The board and management of UOI believe that such proposals can help enhance the company’s value and performance.

Conclusion

The high capital ratios and concentrated position of UOI in Haw Par shares are likely not a coincidence. The insurer’s significant stake in Haw Par Corporation, along with its high capital ratios, suggests that it has a vested interest in the company’s performance. While Great Eastern’s response to Ong’s proposals has been met with skepticism, UOI’s more cordial approach may indicate a more open-minded approach to shareholder value creation.

FAQs

• What are UOI’s capital ratios?
  UOI’s capital ratios are high, indicating a strong financial position.
• What is UOI’s position in Haw Par Corporation?
  UOI holds 17.4 million shares in Haw Par Corporation.
• How did Great Eastern respond to Ong’s proposals?
  Great Eastern’s response was met with skepticism by the Securities Investors Association (Singapore), who believed it was "somewhat legalistic" and sidestepped the substantive concerns raised.
• How did UOI respond to Ong’s proposals?
  UOI took a more cordial tone, welcoming constructive suggestions from its shareholders and acknowledging the proposed resolutions.