Prolexus denies capital market guideline breach; asserts rights to call EGM

BURSA Malaysia Main Market-listed apparel maker Prolexus Bhd has strongly denied any wrongdoing in recent allegations that the group had breached the Malaysia Capital Markets and Services Act (CMSA) 2007.

On this note, it further rejected the demand by South Malaysia Industries Bhd (SMIB) for a mandatory general Offer (MGO) to acquire the remaining SMIB shares not held by the group.

Prolexus also denied as “untrue” all the allegations made by SMIB, particularly that it is acting in concert with other companies and individuals to acquire more than 33% equity stake in the latter.

The group reiterates its strict adherence to Malaysia’s capital market guidelines in its investment in SMIB and has maintained an impeccable governance record within the company.

“We have always been committed in upholding the highest standards of compliance, corporate governance and ethical business practices, and our investment in SMIB is no exception,” commented Prolexus’ group executive director Tan Eik Huang in a statement. “We deny any breach of the CMSA. The allegations are unfounded and without merit”.

Prolexus also highlighted that it possesses sufficient shares in SMIB via Honsin Apparel Sdn Bhd and HIQ Media (M) Sdn Bhd to request an EGM, questioning the current board of directors’ (BOD) refusal in providing SMIB’s record of depositors and therefore frustrating Prolexus through Honsin and HIQ Media in holding the meeting.

According to Section 310(b) of the Companies Act 2016, any shareholder with at least 10% of the company’s issued share capital has the right to call for an EGM. As Prolexus holds 10.01% in SIMB, it is entitled to exercise this right.

“As the matter is currently pending before the court and all of SMIB’s allegations have been raised in the court proceedings, Prolexus does not wish to comment further and shall leave the matter to be determined by the court,” asserted Tan.

Nevertheless, Prolexus stressed that it remains dedicated to safeguard the rights of its shareholders and will continue to engage with the relevant authorities and professionals to resolve the situation fairly and transparently.

The group is confident that it will be vindicated by the outcome of the challenges and legal threats. It also reserves its right to commence legal proceedings against SMIB and its board and all related parties for its false reporting.

At the close of today’s trading, Prolexus was down 2.5 sen or 5.05% to 47 sen with 1.87 million shares traded, thus valuing the company at RM130 mil. – April 4, 2023

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