Not a year short on boardroom dramas

TheEdge Mon, Dec 23, 2019 08:51am - 4 years View Original


Seacera Group Bhd
The battle for control of loss-making Practice Note 17 (PN17) company, Seacera Group Bhd, when news broke out sometime in April this year, had puzzled many in the investing fraternity until they realised it has a 51% stake in a massive 501.5-acre (202.95 ha) land — roughly the size of 380 football fields — in Semenyih, Selangor.

Based on a 2016 valuation, the land is worth about RM786.43 million. Seacera is reportedly partnering OCR Group Bhd to undertake a mixed project with a gross development value of RM10 billion.

So it was not surprising that some shareholders, led by Datuk Tan Wei Lian — who emerged in the company in February — together with his sister Shirley Tan Lee Chin, tried to wrestle control of the board.

To do so, Wei Lian, who is also Tiger Synergy executive chairman, sought to have an extraordinary general meeting (EGM) to remove Seacera’s existing board members and appoint new ones, including Lee Chin. But Wei Lian’s efforts were repeatedly blocked, and even when the EGM went ahead, its validity was not recognised. The once single largest shareholder of Seacera with a 16.36% stake had since pared down his stake to 1.02% as at Oct 10, according to Seacera’s latest annual report, where JS Portfolio was listed with the biggest stake of 4.72%.

In October, several shareholders, including Wei Lian’s wife Datin Sek Chian Nee and JS Portfolio, again tried to call for an EGM scheduled for Dec 3 to appoint Lee Chin and five others as directors, and to remove the existing line-up. But Seacera’s management managed to get a court injunction on Dec 2 to block the meeting.

 

Tiger Synergy Bhd
The Tans, meanwhile, have also been busy defending their management positions in their home turf of Tiger Synergy, where another power tussle is going on with a substantial shareholder, Safari Alliance Sdn Bhd.

Wei Lian holds the executive chairmanship in Tiger Synergy, where his wife Sek is an executive director, and his sister Lee Chin the managing director.

Safari Alliance had reportedly written to Bina Management (M) Sdn Bhd, the share registrar of Tiger Synergy, to get a copy of the Register of Members/Record of Depositors, in order to call for an EGM under Section 310(b) of the Companies Act 2016. This section states that a shareholder, or shareholders with at least a 10% stake, can convene an EGM.

However, Safari Alliance’s request was not met and so it sought the court’s intervention to get hold of the list, according to Tiger Synergy’s filing with Bursa Malaysia on Aug 21, 2019.

A consent order was then recorded on Nov 26 for the list to be provided to Safari, which was duly furnished on Dec 6.

Safari Alliance, which owned an 11.83% stake in Tiger Synergy as at July 19 this year, is the vehicle of Goh Ching Mun, who has a 13.43% stake in Tiger Synergy in his private capacity.

This gives Goh, one of the founders of OldTown Bhd, control over 25.26% of Tiger Synergy. Safari Alliance and Goh are said to be vexed at some corporate deals Tiger Synergy had undertaken in the past five years.

Wei Lian, in response, filed a suit on Oct 2 against Goh, Safari Alliance and several others, claiming they have been acting in concert to seek control of the company with more than 33% of its shares, but did not make a mandatory general offer. Meanwhile, Wei Lian and his family have been increasing their shareholding in Tiger Synergy. As at Dec 18, they held 11.11%, as opposed to 5.12% as at Aug 20.

 

SMTrack Bhd
The boardroom drama in SMTrack started in September, when shareholders of the radio frequency identification track and trace solutions provider, Chung Kah Haur and Queck Han Tiong, saying they had a combined 16.48 million shares or 10.1% stake in the group, requisitioned an EGM to remove three directors from the board.

The duo wanted to remove executive chairman Azmi Osman, executive director Datuk Tan Choon Hwa and senior independent non-executive director Chow Hung Keey, from the group’s six-member board. In their place, they proposed the appointment of Chung himself, together with Kamil Abd Rahman and Lai Mee Hong.

But the meeting was blocked by the board, who announced on Oct 9 it deemed the EGM requisition notice invalid after verifying the duo’s shareholding in the group, saying the tally did not reach the prescribed minimum percentage of 10% when, or after, the notice was served.

A day later, the group launched a lawsuit against Chung and Queck. But the feuding factions seem to have reached an amicable settlement.

On Dec 18, SMTrack announced that a consent order had been recorded between SMTrack and Chung, with no order as to costs at the Kuala Lumpur High Court, and that Chung had withdrawn his EGM requisition notice.

“In light of the consent order there was no longer any necessity for the suit to be proceeded against Mr Queck Han Tiong and as such the company had withdrawn the suit against Mr Queck Han Tiong, with no order as to costs,” SMTrack said in a stock exchange filing.

 

Apex Equity Holdings Bhd
Over a year since it was first proposed, the merger of Apex Equity Holdings Bhd’s unit, JF Apex Securities Bhd, with Mercury Securities Sdn Bhd, continue to meet with resistance from two minority shareholders — Pinerains Sdn Bhd and Concrete Parade Sdn Bhd.

This is despite the majority of shareholders approving the merger at two EGMs, though the first was invalidated following the intervention of one of the dissenting minority shareholders — Pinerains, which is said to be linked to Lim Siew Kim, daughter of the late gaming tycoon Tan Sri Lim Goh Tong — when Apex Equity sought a vesting order to proceed with the merger.

In fact, just two days after Apex Equity gained the second nod from a majority of its shareholders to go ahead with the deal, the dissenting shareholders threw another spanner in the works by taking steps to seek further intervention against Apex’s application for the vesting order that will allow it to proceed with the merger.

ACE Group is currently the single largest shareholder of Apex Equity with a 24.02% stake, which was previously held under ACE Investment Bank, but has been transferred to Ace Credit (M) Sdn Bhd. The immediate family members of Apex Equity’s late founder Chan have about 16.52% equity interest.

Concrete Parade — controlled by former investment banker Lim Beng Guan — has a 4.68% stake in Apex, while Pinerains has 4.17%. The reason behind their continued resistance to the merger, however, remains unknown.

So much so that Apex Equity’s management — directors Datuk Azizan Abd Rahman and Chithra Ganesalingam — have expressed frustration at how the minority shareholders persist in turning to the courts to deny the wishes of the majority.

 

PeterLabs Holdings Bhd
In February, two substantial shareholders of PeterLabs Holdings Bhd, with a 14.01% stake, wanted to oust seven board members, claiming that the directors had been drawing high salaries and that the 10-member board is considered too big for the ACE Market-listed firm.

Executive director Lau Kin Wai, who is also the board representative of Fatfish Venture Sdn Bhd, which is one of the substantial shareholders which served a notice to the company for the removal of the directors, said the board was not optimal due to three reasons.

First, the board is too big for swift decision making and effectively carrying out its function. Secondly, a majority of its board members are above 60 years old and thirdly, the directors are disproportionately rewarded with approximately 45% of the company’s net profit, Kin Wai told The Edge Financial Daily in an interview.

Fatfish, along with substantial shareholder Hoifutinhong Sdn Bhd, sought to remove Lim Tong Seng, Datuk Hon Choon Kim, Dr Paul Cheng Chai Liou, Yap Siaw Peng, Lau Yeng Khuan, Dr Vijaya Raghavan M P Nair and Azman Abdul Jalil.

Lim is the managing director and co-founder of the animal health and nutritional products maker.

In their stead, FatFish and Hoifutinhong proposed the appointments of Chai Choon We, Goh Sim Geh and Cheoh Hor Jin.

There is also a proposal to redesignate Kin Wai as the company’s managing director. In March, he was redesignated from executive director to non-independent non-executive director.

Things took a turn in April after two shareholders — Kho Siaw Sua and Chan Bee Chuan — issued a notice expressing their intention to remove Kin Wai at the group’s annual general meeting (AGM) in May.

Ahead of the AGM, Kin Wai began trimming his stake in PeterLabs held via Fatfish and ceased to be a substantial shareholder on April 16, before stepping down on May 29.

 

D’Nonce Technology Bhd
The boardroom tussle at D’Nonce began in December 2018, when its then biggest shareholder Blackstream Investments Pte Ltd called for an EGM to remove 10 directors, and to appoint its desired choice of replacements.

Those that the Singapore investment company wanted to remove included then chairman Ang See Ming and Kuah Choon Ching, who was the chief executive officer (CEO).

However, the EGM requisition was rendered invalid by the High Court, in relation to a suit filed by D’Nonce on Dec 6 against former managing director and CEO Law Kim Choon, as a special audit by Messrs SH Yeoh & Co found fictitious transactions undertaken by Law during his tenure as CEO.

Both Ang and Kuah resigned in January this year. Subsequently, Tengku Ahmad Badli Shah Raja Hussin was appointed chairman, while executive director Lim Teck Seng was redesignated as group CEO.

In February, Blackstream filed a suit against several former directors as well as Tan Than Kau for alleged conspiracy and abuse of process after the company failed to call the EGM it requisitioned last December.

In return, D’Nonce filed a counterclaim to the suit, adding Law as a defendant. It also claimed that Blackstream was acting in concert with Law to take over the company and to interfere with the full audit.

Blackstream’s requisition for an EGM eventually went through and the meeting was held on June 12. While the meeting was adjourned about 10 minutes after it commenced, following a motion by a shareholder, the meeting continued afterwards, with several resolutions passed. In July, the court declared the adjournment of the EGM was invalid and that all resolutions passed at the EGM were valid.

Tan, who was appointed on July 1, was removed from the board, along with Ng Kok Wah, Thoo Soon Huat and Yap Chee Keong.

The court also ruled that the re-elections of Yeo Boon Leong, Ng and Tengku Ahmad as directors at the company’s AGM on June 17 were invalid.

Lim was also removed as CEO, and the post was taken over by Tho Yow Yin.

The former directors had attempted to file an appeal against the court’s judgment, but the company, which was then controlled by a new board of directors, said the appeal was filed without the authority of D’Nonce and subsequently dropped the appeal.

 

APFT Bhd
The boardroom tussle at loss-making flight training provider APFT Bhd, which started with the company’s lawsuit against former chairman Datuk Faruk Othman for the alleged misappropriation of company funds and for causing APFT to trigger the PN17 status, has gone on for more than a year.

In January this year, barely three months after the appointment of Datuk Tan Choon Hwa and Tan Sri Zaini Omar as directors, the company received a requisition from shareholders for an EGM to remove the new appointees, along with three other directors — Edwin Silvester Das, Tengku Shamsulbhari Tengku Azman and Saiful Azhar Mohd Yusoff.

On Jan 30, APFT decided not to proceed with its suit against Faruk, as another suit, filed by the company’s substantial shareholder Goh Boon Soo @ Goh Yang Eng and nine others against APFT and its current directors, was dropped.

The shareholders called for an EGM on Jan 18, during which new directors were appointed to the board, namely Jeya Kumar Jegathison, Chan Tiam Hin and Datuk Md Ismail Hamdan.

Besides them, Lee Eng Soon, Michael Heng Chun Hong, Laxmi Devi Murugan and Logonathan Vadivelu were also appointed directors. Meanwhile, Edwin, Zaini and Saiful Azhar were removed from the board.

However, Jeya Kumar resigned from his post less than a month after his appointment, citing “personal reasons”. Ismail, Laxmi and Logonathan also resigned in April, after shareholders called for another EGM to remove all three directors — the third such requisition by shareholders to remove directors of the company.

Following that, both Tan and Lee resigned in May, while chief operating officer Siva Kumar Kalugasalam was promoted to CEO effective April 24.

While the suit against Faruk was dropped in January, APFT’s board of directors had, in July, initiated another civil suit against the former directors, namely Faruk, Arif Faruk, Tan Boon Leng and Tan Nyap Keong @ Tony Tan, alleging breach of fiduciary duties during their tenure as APFT directors.

The suit is still ongoing, with the next hearing date fixed for June 29, 2020.

The content is a snapshot from Publisher. Refer to the original content for accurate info. Contact us for any changes.






Related Stocks

5194 0.000
APEX 1.000
BURSA 7.460
OCR 0.060
PLABS 0.200
SEACERA 0.215
SMTRACK 0.050
TWL 0.030

Comments

Login to comment.