HONSIN Apparel Sdn Bhd, a wholly owned subsidiary of Techbase Industries Bhd (previously Prolexus Bhd), has expressed profound disappointment with the current South Malaysia Industries Bhd’s (SMI) board of directors (BOD) with regard to its management practices.
The company is deeply troubled by SMI’s persistent losses attributable to owners of the parent since 2019. Additionally, the substantial increase in SMI’s director fees for its financial year ended (FYE) June 30, 2023 is disproportionate given the company’s financial performance.
This expression of concern follows SMI’s recent announcement of filing a judicial review against the Securities Commission Malaysia (SC).
Honsin Apparel is particularly troubled by the property developer’s prolonged delay in convening an annual general meeting (AGM) which has persisted for 21 months without any public explanations to SMI’s shareholders.
This departure from the customary 12-month AGM timeline raises serious questions about the transparency and accountability of SMI’s management.
“We are profoundly disappointed with the actions of the current BOD of SMI. Their focus and priorities appear to be starkly misaligned with the interests of the shareholders,” lamented a spokesman for Honsin Apparel.
“Instead of fostering the advancement of the company, there seems to be a lack of transparency in certain decisions. We hope there’s no further delay to SMI’s AGM.”
In fact, the actions of SMI’s directors which undermine shareholders’ rights and erode confidence in the company’s governance could have profound implications on foreign investment confidence in Malaysia.
As investors keenly observe corporate governance standards in public listed companies (PLCs), any deviations from corporate governance (CG) standards can significantly impact investor sentiment.
Moreover, there is a pressing concern that SMI’s incumbent directors have failed in their fiduciary duties by persistently delaying the company’s AGM, thereby obstructing shareholder engagement and oversight without demonstrating any tangible efforts to address SMI’s on-going financial losses.
Moreover, Honsin Apparel has won a case calling for an extraordinary general meeting (EGM). However, SMI has applied for a stay on the judgment, hence further delaying the EGM.
Additionally, SMI has applied to the Companies Commission of Malaysia (SSM) for a delay in holding the AGM without providing any valid reasons to the shareholders.
In light of these developments, Honsin Apparel has filed a suit against SMI’s major shareholder Asian Pac Holding Bhd (AsiaPac) bearing Case No. WA-22NCC-879-12/2023 Honsin Apparel Sdn Bhd and HIQ Media Malaysia Sdn Bhd against Mah Sau Cheong and 15 others.
“We urge all shareholders to attend and vote in the upcoming AGM to exercise their shareholder rights and to express their views on the management of the company,” urged the Honsin Apparel spokesman.
“It is crucial that we stand together to ensure transparency, accountability and good governance in SMI. Honsin Apparel remains committed to advocating for the rights of shareholders and the betterment of SMI.”
At the close of today’s trading, SMI was up 0.5 sen or 0.79% to 63.5 sen with 21,900 shares traded, thus valuing SMI at RM133 mil. – March 15, 2024
