U.S. blacklist puts reverse takeover of Aussino in doubt: bankers

While Singapore does not impose sanctions on Myanmar, the experts Reuters spoke to said authorities would be cautious about letting a firm list if there are question marks about the owners and managers.

"Bankers are supposed to do due diligence to ensure integrity of management. Appearing on a U.S. watchlist won't do," said one of the bankers, who declined to be named because of the sensitivity of the issue.

Aussino shares closed 8.4 percent higher at S$0.167 on Friday with almost 41 million shares changing hands. The stock has risen 76 percent since Aussino announced on Monday the Max Myanmar group planned to take control by injecting assets.

Under the terms of a non-binding memorandum of understanding, Aussino will issue new shares to buy a firm called Max Strategic Investments which will operate petrol kiosks in Myanmar.

Max Myanmar, which is headed by Myanmar businessman Zaw Zaw, will gain majority control of Aussino as a result of the transaction.

Zaw Zaw is on a U.S. government list of "Specially Designated Nationals" because of his business ties with former Myanmar strongman Than Shwe.

People who appear on the list will have their assets blocked and "U.S. persons are generally prohibited from dealing with them," the Treasury Department said on its website.

Marcus Chow, a partner at law firm ATMD Bird & Bird, said regulators may be wary of the risk of provoking political sensitivities.

"The regulators are likely to be quite careful about how any approval they give will be perceived, particularly from a government-to-government perspective," he said.

"They may be worried about the sensitivities involved in any form, whether it's real or not, of implicit endorsement of any behavior in connection to U.S. sanctions," he added.

The Aussino announcement did not name the advisers involved. Aussino could not be reached for comment at the telephone number and email listed on its website and previous press releases.

Aussino has been on the watchlist of the Singapore Exchange (SGX) since Sept 6 last year, which means the loss-making company will be delisted unless it meets several requirements including achieving a certain level of profit within 24 months.

Max Strategic Investments could not be contacted at a telephone number matching the address stated on its company registration.

SGX has not yet responded to a Reuters request for comment.

Max Myanmar, which makes annual revenues of $500 million, has businesses ranging from timber, gems and rubber plantations to construction and luxury resorts.

(Reporting by Kevin Lim, Eveline Danubrata and Rachel Armstrong; Editing by Nick Macfie)