SOUTH Malaysia Industries Bhd (SMIB) had through its legal counsel, lodged a complaint with Securities Commission Malaysia (SC) after identifying over 20 parties comprising companies and individuals acting in concert with Honsin Apparel Sdn Bhd and HiQ Media (M) Sdn Bhd to acquire more than 33% equity stake in SMIB in the last six months ended Feb 17 this year.
SMIB had provided documentary evidence that the parties had breached Section 218 (2) of the Capital Markets and Services Act 2007 (CMSA) which requires them to make a mandatory general offer to acquire all the shares in SMIB not held by them.
This was revealed in the court papers filed by SMIB to defend against the suit brought about by Honsin and HiQ.
Beside Prolexus Bhd which is the holding company for Honsin and HiQ, the parties acting in concert with them, among others, are another listed company YB Ventures Bhd, one of the executive directors and a substantial shareholder of both Prolexus and YB Ventures alongside some close relatives.
Honsin and HiQ had on Feb 23 filed a suit at the Kuala Lumpur High Court in an attempt to compel SMIB to provide the record of depositors (ROD) as at Feb 20.
This is given that both Honsin and HiQ had wished to call an extraordinary general meeting (EGM) to replace the entire five-member SMIB board, including all the independent directors with no justifications or reasons and to appoint in their place just two persons nominated by them.
The two directors proposed by Honsin and HiQ for SMIB, Lee Boon Siong, 42 and Tan Eik Huang, 37 are directors of YB Ventures while Tan is also a director of Prolexus.
”SMIB had included these findings in the complaint to SC as supporting evidence and in its affidavit in reply following Honsin and HiQ’s non-compliance with the court’s order by submitting yet another affidavit five days after the date set by the Kuala Lumpur High Court for the submission of their affidavits,” SMIB pointed out in a statement.
“Honsin and HiQ’s late affidavits were affirmed by Workshire Share Registration Sdn Bhd and Aldpro Corporate Services Sdn Bhd respectively.”
Aldpro Corporate Services is the share registrar for both YB Ventures and Prolexus. Both registrars provided expert opinions that it is reasonable for a public listed company (PLC) to provide to any shareholder the company’s ROD to support Honsin and HIQ’s demands for SMIB’s ROD in less than two working days.
”In checking with other share registrars, SMIB found both registrars’ affidavit to be a departure from professional practice where share registrars do not provide advice or expert opinion unless they are appointed by the PLC or by other PLC controlled by the same major shareholders,” justified SMIB.
“We now understand the reason behind the high-handed approach of Honsin and HiQ in demanding SMIB to provide the ROD in one working day and filing their suit in the Kuala Lumpur High Court against us.”
Added SMIB: “These parties acting in concert are attempting to take over SMIB without making a mandatory general offer which is against the takeover and mergers code. If they succeed, they will take control of SMIB without consideration for the rights of all other SMIB shareholders including minority shareholders.”
At the close of today’s mid-day trading, SMIB was up 0.5 sen or 0.95% to 53 sen with 10,200 shares traded, thus valuing the company at RM110 mil. – April 4, 2023
Main pic credit: The Edge