Pan-Electric Industries was a

Singapore Singapore, officially the Republic of Singapore, is an island country and city-state in Southeast Asia. The country's territory comprises one main island, 63 satellite islands and islets, and one outlying islet. It is about one degree ...

-based company that specialised in

marine salvage Marine salvage is the process of recovering a ship and its cargo after a shipwreck or other maritime casualty. Salvage may encompass towing, lifting a vessel, or effecting repairs to a ship. Salvors are normally paid for their efforts. Howev ...

work, and had 71

subsidiary A subsidiary, subsidiary company, or daughter company is a company (law), company completely or partially owned or controlled by another company, called the parent company or holding company, which has legal and financial control over the subsidia ...

companies, including hotel and property interests, with a

market capitalization Market capitalization, sometimes referred to as market cap, is the total value of a publicly traded company's outstanding common shares owned by stockholders. Market capitalization is equal to the market price per common share multiplied by ...

of S$230 million. The company collapsed in December 1985 due to massive unsettled

forward contract In finance, a forward contract, or simply a forward, is a non-standardized contract between two parties to buy or sell an asset at a specified future time at a price agreed on in the contract, making it a type of derivative instrument.John C Hu ...

s, forcing the

Stock Exchange of Singapore The Stock Exchange of Singapore (SES) was a stock exchange company in Singapore. It was formed in 1973, when the termination of currency interchangeability between Malaysia and Singapore, caused the Stock Exchange of Malaysia and Singapore (SEMS) ...

(SES) and

Kuala Lumpur Stock Exchange Bursa Malaysia (English: Malaysian Bourses or Malaysia Exchange) is the stock exchange in Malaysia. It is one of the largest bourses in ASEAN. It is based in Kuala Lumpur and was previously known as the Kuala Lumpur Stock Exchange (KLSE). It p ...

(KLSE) to shut down for three days. At its demise, the company had a total

debt Debt is an obligation that requires one party, the debtor, to pay money Loan, borrowed or otherwise withheld from another party, the creditor. Debt may be owed by a sovereign state or country, local government, company, or an individual. Co ...

of S$480 million, and all its shares held by 5,500 shareholders were found to be worthless overnight. As of 2000, it remains the largest corporate collapse in Singapore's history, and the only instance where the SES had to be unexpectedly closed. In the aftermath of the collapse, key people in the company such as

Peter Tham Peter Tham Wing Fai (born 1948) is a Singaporean stockbroker and the director of Pan-Electric Industries. A failure by him to observe a forward contract agreement that he negotiated with Tan Koon Swan was responsible for the company's collapse ...

, Tan Kok Liang, and

Tan Koon Swan Tan Koon Swan (; born 24 September 1940) is a Malaysian political and corporate figure. He was the fifth president of the Malaysian Chinese Association (MCA), a component party of Barisan Nasional (BN) coalition; from November 1985 to Septemb ...

were prosecuted and given varying jail sentences. The collapse of the company shook public confidence in the SES, causing prices of stocks to plunge and resulted in the

bankrupt Bankruptcy is a legal process through which people or other entities who cannot repay debts to creditors may seek relief from some or all of their debts. In most jurisdictions, bankruptcy is imposed by a court order, often initiated by the de ...

cy of some stockbroking firms. New securities laws were introduced in March 1986 to ensure that stockbroking firms could protect themselves against credit risks.

References

Defunct companies of Singapore Companies disestablished in 1985 1985 in Singapore {{Singapore-company-stub