Singapore Exchange (SGX) Whistleblower Complaint Regarding JERA Bonds

On February 15, 2023, a whistleblower complaint was submitted by NGO Market Forces to the Singapore Exchange alleging that JERA Co. Inc. (JERA) failed to disclose material information regarding its US$300 million bond issued on April 14, 2022. The complaint asserts that: (1) JERA allegedly failed to disclose risks related to its significant exposure to the LNG value chain and climate transition risks. These risks allegedly include (i) the impact of the Russia-Ukraine war on JERA’s business, including downward revision of LNG demand due to volatility and high prices; (ii) JERA’s lack of analysis in demonstrating alignment with the Paris Agreement or risks posed by the IEA's "Net Zero by 2050" scenario, unlike peers in the industry; (iii) JERA’s alleged reliance on unproven technologies like ammonia and hydrogen co-firing without disclosing cost assumptions or acknowledging past failures in carbon capture and storage; and (iv) that JERA would be affected by a rapid transition to renewable energy that may undercut the LNG industry, as JERA’s generation assets are allegedly predominantly gas-fired, with only 2% coming from renewables, and JERA allegedly has not disclosed plans for a rapid capital shift toward renewables despite market trends. (2) JERA allegedly has not disclosed specific litigation cases, which could have a material effect on JERA’s future financial prospects, thereby preventing investors from making an informed assessment of the company's prospects. The litigations cases are (i) Litigation by Tiwi islanders concerning the Barossa Gas Field in Australia, which resulted in the Federal Court of Australia invalidating the project's environmental permits due to lack of consultation. JERA holds a 12.5% stake in this project; (ii) Litigation regarding environmental impact assessments the Yokosuka coal power plant project, in which there is a risk of permit cancelation for the project if litigation is successful. Further, JERA has failed on an ongoing basis to disclose developments in litigation proceedings as these developed. As a consequence, Market Forces alleges that JERA is in violation of the Securities and Futures Act (SFA) (and its subsidiary legislation, Offers of Investments Regulation 2018) and the Singapore Exchange Rulebook Rules 603, 243 and 323. These respectively have the following requirements: (i) SGX Rule 603: Requires offering memoranda to include sufficient detail for investors to understand the issuer's business, financial conditions, and risks. (ii) SFA Section 243: Mandates that a prospectus contain all information investors reasonably require to make an informed assessment. The Offers of Investments Regulation 2018 (subsidiary legislation) further prescribes a checklist of information that must accompany the prospectus of a debenture, such as “risk factors that are specific to the relevant entity and its industries” and legal or arbitration proceedings that “have a material effect on the financial position or profitability of the relevant entity”. (iii) SGX Rule 323: Imposes a continuing disclosure obligation for information that may materially affect the price or value of debt securities. Market Forces' complaint is available here: https://www.marketforces.org.au/wp-content/uploads/2023/02/20230215_SGX_JERA-CO-US300M-3.665B270414_omission-of-material-information.pdf As of late 2025, there have been no reports of public disciplinary action by the Singapore Exchange regarding this whistleblower complaint.