Is Tuas now a bargain after today’s brutal sell-off, or still too risky?

TUAS Limited has seen a massive price fall due to a show case notice by IMDA, highlighting a major corporate governance and regulatory issue.

Tuas Limited (ASX: TUA) is a communication service-based company listed on ASX, which is down by more than 30% as of  now and has a market capitalisation of $998.08 million.

TUA has announced on 26 October 2026 that the Infocomm Media Development Authority of Singapore (IMDA) issued a show cause notice to Simba Telecom Pte Ltd (Simba), a wholly owned subsidiary of Tuas.

IMDA has requested Simba to respond to certain allegations and matters. It includes an allegation of unauthorised use of 2100 MHz to be used for both 4G and 5G, when it was authorised to use it for 5G only, as it has used dynamic spectrum sharing (DSS) at about 133 sites during the period of 2022 and 2023. The second allegation includes use of the 2340-2360 MHz spectrum at approximately 92 sites during 2023 to 2026.

IMDA also alleged that this deployment of DSS was intentional and approved by Simba senior management, highlighting a major governance issue. Another allegation includes a deployment of 5G indoor radio access network equipment at two locations during 2023 before receiving the required regulatory approvals. Later the company has received the approval after the deployment.

IMDA has also highlighted in one of its allegations that Simba has not complied with a production order and has breached the order. A production order requires a regulated company to provide specified information/documents to the regulator. IMDA has also found deficiencies in Simba’s governance and compliance culture, and the company is unable to manage its regulatory compliances.

Potential penalties and fines Tuas/Simba can face

The most significant action could be a potential suspension or cancellation of its spectrum right, either partly or as a whole. Potential financial penalties include higher of 10% of relevant annual turnover or S$1 million. It can also have another penalty under Section 10 of the Telecommunications Act, including a penalty higher of 10% of relevant annual turnover or S$1 million.

Further Proceedings

Simba has to submit its response by 16 November 2026, regarding all the allegations and matters raised by IMDA. Afterwards, IMDA will review the submission and determine what action should be taken. The potential outcome includes no action or warnings or financial penalty or spectrum restriction or licence restriction.

Conclusion

The recent announcement has a severe downside impact on the company, as it raises questions about the quality of senior management, raising a major corporate governance issue. The development highlights a massive regulatory misconduct, enabling regulatory risk. If the potential outcome is not in favour of the company, then it can increase operational risk, as any spectrum and license restriction will impact the operation and can have huge impact on future earnings and cash flow generation ability. The potential financial penalty can also impact the future earnings of the company, reflecting a huge impact on the net profit of the company. TUA highly relies on SIMBA for its revenue and earnings, which will get affected by the aannouncement, as many potential orders can get cancelled until the IMDA verdict.

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(Source: Company Announcements)