THE 10 current directors of SC Estate Builder Bhd (SCBuild) has unlawfully rejected the nomination by its two shareholders for eight individuals to stand as candidates for election for the office of director at the company’s forthcoming 17th annual general meeting (AGM) this Friday (Dec 31).
Country Heights Holdings Bhd executive chairman Tan Sri Lee Kim Yew who is one of the eight nominated candidates said Valuevest Ventures Sdn Bhd (which holds 23.09 million shares) and Datuk Eric Tan Chwee Kuang (who holds 27 million shares) have made written nominations on Dec 17 for the eight candidates to stand for election.
“The constitution of SCBuild makes accommodation for the election of directors at the AGM,” Lee pointed out in a media statement. “In particular, Clause 127 states that any one member of SCBuild may propose a person to be a candidate for election to the office of director of SCBuild at the AGM.”
Aside from Lee, the other seven nominated candidates are Chow Hung Keey, Datuk Fizal Kamarudin @ Fauzi, Datuk Eric Tan Chwee Kuang, Chean Meng Hee, Chong Nee Wen; Jee Hui Zhi and Datuk Lwee Wan Tiong.
The current 10 directors on the board of SCBuild are Loh Boon Ginn, Kuay Jeaneve, Kuay Jen Nie, Chee Jun Ann, Josipinna Pundun, Loo Tze Ming, Chan Wei Xi, Soo Ting Hooi, Loh Shy Tyug and Loh Shy Ming.
According to Lee, the two shareholders made written nominations on Dec 17 for the eight candidates who are standing for election to the office of director.
Each nomination paper was accompanied by (i) a notice giving consent to nomination and signifying candidature (signed by the candidate), (ii) a declaration (pursuant to section 201 of the Companies Act 2016) of the person before appointment as director; and (iii) a profile of nominee for election to the office of director of SCBuild (in the format required by Bursa Malaysia).
However, on Dec 21, the current directors e-mailed each of the eight candidates (copied to the nominator members and their lawyers Yoong & Partners) foisting on them five queries relating to (i) their “relationship” with the nominator members; (ii) knowledge and description of such alleged “relationship”; (iii) knowledge of other candidates; (iv) events in detail leading to their nomination; and (v) why they consented as well as how he/she is able to exercise “independent” judgment and act in the best interest of SCBuild.
“The current directors also demanded that each of the nominator members ‘furnishes proof’ of its/his shareholdings in SCBuild,” noted Lee.
On the same day (Dec 21), Yoong & Partners replied on behalf of the nominator members. Simply put, the nominator members had nominated the candidates to be “directors” and not as “independent directors” as the current directors tried to paint it to be. As such, the five queries foisted on the eight candidates were irrelevant.
On Dec 22, the current directors replied by claiming that each of the candidates “must also satisfy the requirements that they are qualified for such nomination [as “independent directors”], and that the “refusal in attending to [the current directors’] reasonable queries, by itself [it] is a clear indication that the [candidates] are not independent and are acting in accordance with the wishes of [the nominator members]”.
Without waiting for any further response from the nominator members, Lee said the current directors announced on Dec 22 to “reject” the nomination of the eight candidates.
“Both SCBuild and the individual current directors were warned of the consequences of a breach of Clause 127 as well as of section 340(1)(d) of the Companies Act which could attract criminal liability and if convicted could be punished by a fine of up to RM20,000 each,” cautioned Lee.
“The current directors are acting unlawfully attempting to block the candidature of the eight nominees put forward by the two nominator members on the wrong or mistaken premise that the nominations were for “independent directors” and the candidates are not so “qualified”.
He added: “In effect, the current directors have accepted the full validity of the nomination papers as lodged by the nominator members but ‘have rejected the nominations’ without lawful basis or cause.”
At 9.40am, SCBuild was unchanged at 7 sen with 99,000 shares traded, thus valuing the company at RM75 mil. – Dec 29, 2021
