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Boardroom tussles stir excitement

TheStar Sat, Apr 20, 2019 08:45am - 6 months ago


Although not uncommon in the listed-company scene, boardroom tussles seem to be creating a bigger presence of late.

Market players will notice that at least three Bursa Malaysia-listed companies are in the throes of a good fight.

The firms are industrial packaging company D’nonce Technology Bhd, animal health and nutrition company Peterlabs Holdings Bhd , and tile maker cum property developer Seacera Group Bhd .

In the case of D’nonce, the obvious signs of a shareholder fight emerged last year.

Recall, the former owner who was also the company’s managing director and CEO, Law Kim Choon stepped down last July to pursue “personal interests.”

He had earlier sold his stake in the Penang-based company for a handsome premium.

Consequently, the firm had a new management team.

A legal battle then ensued with this team suing Law for fraud and breaching of fiduciary duties.

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The firms are industrial packaging company D’nonce Technology Bhd, animal health and nutrition company Peterlabs Holdings Bhd, and tile maker cum property developer Seacera Group Bhd.

In the case of D’nonce, the obvious signs of a shareholder fight emerged last year.

Recall, the former owner who was also the company’s managing director and CEO, Law Kim Choon stepped down last July to pursue “personal interests.”

He had earlier sold his stake in the Penang-based company for a handsome premium.

Consequently, the firm had a new management team.

A legal battle then ensued with this team suing Law for fraud and breaching of fiduciary duties.

A month later, in January, D’nonce saw the resignation of this team.

Former chairman of JF Apex Securities Bhd, Lim Teck Seng who is also ex executive director of Apex Equity Holdings, was then appointed as CEO.

In the midst of all the changes, an outfit which calls itself Blackstream Investments Pte Ltd and supposedly a fund based in Singapore had surfaced in the company last November.

It has since built up its holdings to a direct stake of 25.6%, making it the single largest shareholder in the firm.

The entry of Blackstream raises several questions as to why a foreign party has suddenly emerged in a smallish firm and who the party is linked to.

When contacted, D’nonce CEO Lim says: “I am not sure of their (Blackstream’s) intention but it is unusual for a fund to ask for a board seat and be involved in management.”

In the meantime, it appears to be business as usual for the company.

According to Lim, D’nonce, which is currently loss-making, will undergo an internal restructuring where five businesses will eventually form the group’s core operations.

The businesses are the clean room, packaging and plastic moulding, carton box and printing , property and trading activity businesses.

“We also plan to list some of the group’s subsidiaries overseas and are considering the Thailand stock exchange for this purpose,” Lim adds.

D’nonce shares have traded between 29 sen and 75.5 sen in the past one year. It is currently at 45.5 sen, giving it a market capitalisation of slightly more than RM100mil.

Peterlabs and Seacera

Meanwhile at Peterlabs, the tussle appears to be nearing the finishing line, with Lau Kin Wai of Fatfish Venture Sdn Bhd – the centre of the fight – appearing to be backing off, if his recent trimming of stake in the firm, is anything to go by.

Lau told Bursa Malaysia on Thursday that he had trimmed his stake in Peterlabs, selling some 8.5 million shares in the open market and bringing his stake down to 17.1 million shares or about 8%.

Recall on April 5, Peterlabs told the stock exchange that it was unaware of the reason behind a sudden spike in its share price and volume. Within that week, Peterlabs’ share price had gained almost 20%.

A week later, the company said two of its shareholders – Kho Siaw Sua and Chan Bee Chuan had indicated that they wanted Lau out of the company.

According to sources, Lau had wanted to inject a crypto-related business into the company but other shareholders were against this.

To be sure, Lau’s Fatfish Venture is the local vehicle of global Internet venture accelerator Fatfish Internet Group Ltd.

In March, Lau had said he was seeking to change Peterlabs’ board composition and he had a four-pronged strategy to increase the profitability of the firm.

A month before that, he had requisitioned for an EGM to remove seven directors, appoint three new ones, and redesignate himself as the only MD of Peterlabs.

Lau had, in an interview with StarBiz last year, said that the long-term plan for Fatfish Ventures was to raise its stake in Peterlabs and gain control of the company.

Fatfish Ventures, emerged in Peterlabs with a 7.7% stake in April 2017. Lau was then made an executive director in the firm in January 2018.

Now that he has trimmed his stake in the company, it remains to be seen whether his plans for the company will materialise.

Seacera, meanwhile, has had a few dramatic twists of its own in recent weeks.

The tile maker which is also involved in property development, appeared promising at one point, but it is now saddled with debts and losses.

However, that has not stopped individuals from fighting for it.

At the centre of a shareholder tussle appears to be its prized possession of 501 acres of land in Semenyih.

However, the land, according to sources is not all it’s made out to be as it allegedly has encumbrances including the lack of suitability for development purposes and it being tied down by the owners of debt paper.

Seacera’s single largest shareholder Datuk William Tan Wei Lian, however, has said the land is free from encumbrances and has a book value of about RM784mil. In total, he says the group has net assets totalling RM838mil.

Tan has called for an EGM to be held on May 15 to appoint six new directors and to remove eight existing directors of the firm.

Yesterday, the group’s board of directors said it would take legal action against Tan, citing the notice of the EGM to be “unlawful, null and void.”

Tan with a 13.96% stake in Seacera, making him the company’s single largest shareholder, emerged in the company in February.

The major owner and executive chairman of property developer and furniture maker Tiger Synergy Bhd, Tan’s emergence has gotten observers asking if his entry into Seacera is linked to efforts to help the business of Tiger Synergy which reported losses for its financial year ended June 30, 2018. It has been in the red in the last four financial years. Seacera’s shares last traded at 32.5 sen, off its 52-week high of 61 sen.

Like most things, time will tell how the boardroom struggles pan out. In the meantime, the tussles go on.








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