THE Minority Shareholders Watch Group (MSWG) has praised Seni Jaya Corporation Bhd’s three independent non-executive directors (INEDs) for their outright stance of stating the case that led to their stepping down from the company’s board.
“It is commendable that the trio have provided granular details as to the reasons for their resignations,” Devanesan Evanson who is the CEO of the shareholders’ activism group told FocusM.
“Minority shareholders have now been put on notice of the reasons (allegations) and they will be able to exercise some informed decision-making. The allegations, if true, constitute serious breaches of the Listing Requirements and non-application of corporate governance practices.”
In a May 4 Bursa Malaysia filing, the three INEDs Datuk Seri Dr Liew Lee Leong, Lim Chee Khang and Datuk Shamsul Falak Aabdul Kadir have attributed their decision to step down to among others, increase in the share price and the significant disposal of Seni Jaya’s shares by its two largest shareholders (Datin Lee Nai Yee and Datuk Seri Anne Teo).
Teo is the executive chairman of Seni Jaya and also the sister-in-law to Lee who is the company’s non-independent non-executive director of the group.
“This raises the immediate concern as to whether there is a takeover exercise going on without my and my fellow independent directors knowledge,” reasoned Lim who is also the chairperson for the remuneration committee.
“I certainly do not feel comfortable with this recent happening as my fellow independent directors and I are unable to obtain a satisfactory explanation despite several enquiries made both verbally and in writing to the two largest shareholders-cum-board directors and the company secretary.”
For the record, Seni Jaya’s share price has spiralled from a 52-week low of 36 sen to as high as RM2.17. It was last traded at RM1.64 on the day of the Bursa filing (May 4).
Seni Jaya is principally involved in providing media and production services for both indoor and outdoor advertising in Malaysia.
Elsewhere, the three INEDs also contended that the proposed appointment of an additional independent director was not in line with the standard operating procedures (SOPs) as it never went through to both the nomination and remuneration Committees (the nomination committee is chaired by Liew).
“Likewise, with the appointment of the CEO. Although there is no mandatory requirement that such appointment may need to go through the independent directors but for good governance, surely it must be approved at board level,” asserted Lim.
“We, the independent directors, have no prior notice of the above proposed appointments prior to receiving the relevant circulars requiring our signatures.”
Moreover, Lim is also of the view that the company secretary should have advised whoever gave the instruction for the said new appointment(s) via resolutions to adhere to the SOPs.
“Under the circumstances, I have no alternative but to resign from the board of directors of the company with immediate effect, relinquishing all positions,” Lim pointed out.
Applauding the action of Lim, Liew and Shamsul Falak, Devanesan said there is honesty, integrity and transparency whenever directors give the actual reasons for their resignation.
“It has become a norm for resigning directors to give the ‘pursuit of other interests’ as a boiler-plate reason when this may not be the reason,” he lamented.
“These directors are doing an injustice to the minority shareholders who depend on them to safeguard their interest. Giving the actual reason for their resignation is one way of safeguarding minority shareholder interests.” – May 6, 2021.
