KUALA LUMPUR (Oct 17): Two shareholders of GN3 company R&A Telecommunication Group Bhd, who are holding not less than 10% of the company's shares, are calling for an extraordinary general meeting (EGM) to remove the entire board of directors.

R&A told Bursa Malaysia today it has received written requisitions to convene the EGM from Nexgram Holdings Bhd and founder-cum-former chief executive officer (CEO) of R&A Francis Tan Hock Leong, who is also being sued by the company.

According to R&A’s financial year ended Dec 31, 2015 (FY15) annual report, Nexgram’s shareholding stood at 6.83% as at April 20, 2016, while Tan owned 7.85%, of which 1.38% is held via his wife Cheoh Chun Lian.

Tan was redesignated as executive director back in May 2015, while Sim Keng Siong was appointed CEO. Tan then stepped down as ED on Dec 29 last year, citing “other personal business commitments”.

In their written requisitions, Nexgram and Tan are seeking to remove incumbent CEO Sim, together with three other independent non-executive directors, i.e. Chua Soo Seong, Lim Tiong Jin and Selva Rasan A/L Datuk Puspa Das.

To replace the three, Nexgram and Tan have put forth the names Rajendra Raja A/L S Govendaraj, Cheang Soon Siang, and Kamal Abdul Aziz to be appointed as new R&A directors.

R&A has been given 14 days to call for the EGM.

In a separate filing, R&A said its wholly-owned subsidiary R&A Telecommunication Sdn Bhd (RASB) is suing Tan, who is also a director in RASB, for having breached various director's duties to the company.

RASB alleged that Tan failed to effect statutory payments to the Employees’ Provident Fund (EPF), the Social Security Organisation (Socso), the Inland Revenue Board (IRB) and the Human Resource Development Fund — collectively referred to statutory creditors — in a timely manner, as required under the laws.

He also diverted funds which ought to have been used for such purposes towards other usages, according to R&A's filing.

RASB, who is claiming for RM1.38 million from Tan, on top of damages and interests, also accused him of not acting in the best interest of the company.

R&A said the lawsuit was filed through its solicitors, Messrs Syed Ibrahim & Co on Oct 11 this year.

R&A further claimed that as a result of Tan's actions, RASB's new management had to divert valuable funds to pay the statutory dues and penalties imposed by the statutory creditors.

“The imposition of penalties is still continuing. Further announcement on the development of the above matter will be made to Bursa Malaysia in due course,” the group added.

R&A was classified as a GN3 company in 2015 after its auditors said they could not obtain sufficient audit evidence to provide a basis of audit opinion on R&A's 2014 financial statements.

R&A’s shares have been suspended from trading since September last year.