Article & Commentaries
GOLDEN PLUS BOARD TUSSLE – MINORITIES TO EXERCISE RIGHTS
22 January 2008
The fight for the control of Golden Plus Holdings Berhad (GPlus) surfaced in late 2007. Many minority shareholders are now in a state of anxiety and confusion.
Background
On 27 December 2007, Indian Corridor Sdn Bhd (Indian Corridor) and Pembangunan Qualicare Sdn Bhd (Pembangunan Qualicare), the new shareholders who hold 18.6% and 1.15% interest respectively in GPlus served a Special Notice on GPlus and requisitioned for an extraordinary general meeting to be held on 26 January 2008 in Penang to seek shareholders’ approval for the removal of all six current directors in GPlus (Penang EGM).
On 9 January 2008, the Board of Directors of GPlus contested against the Special Notice and called for a separate EGM of the Company to be held on the same day and time in Kuala Lumpur (KL EGM). The agenda of the KL EGM is to get shareholders’ approval to pass an ordinary resolution to determine the validity of the Special Notice served on the Company on 27 December 2007.
The new shareholders of GPlus, particularly Indian Corridor as a major shareholder expressed unhappiness over the management agreement signed between a subsidiary of GPlus, Yanfull Investments Ltd (YIL) and China Idea Development Ltd (CIDL). The CEO of Indian Corridor had publicly voiced his unhappiness over certain terms of the agreement such as the reimbursement rate by CIDL to YIL for the sale of the Royal Garden residential project in Shanghai which he felt to be substantially lower than the market rate.
The current Board of GPlus had on 16 January 2008 filed an application for an injunction against Indian Corridor and Pembangunan Qualicare to restrain them from convening and proceeding with the Penang EGM. However, the court hearing of the Company’s application for the injunction was adjourned yesterday to 25 January 2008, a day before the respective EGMs.
Views of MSWG
It remains uncertain as to the reasons for holding the EGMs on the same day and time. The two EGMs are separate events which can cause confusion to minority shareholders who have to choose one EGM over another. Having two concurrent EGMs is against the spirit of best practice as it deprives the minority shareholders from attending the two EGMs in person.
The current Board of GPLus also called a public forum at the SC on 18 January 2008. MSWG is of the view that this unprecedented move reflected the unclear stance of the Board although an EGM would be the more appropriate platform to do so. Minority shareholders questioned whether the Board had rightly spent the money for the public forum. In addition, the non-presence of the major shareholders (albeit sending a legal representative) rendered the public forum unfruitful. Minority shareholders present were unable to obtain the first-hand views between the disputing parties.
The minority shareholders are advised to follow closely the developments of the boardroom saga as published in the press and announcements via Bursa Malaysia. They need to obtain a better understanding of the matter and be able to raise appropriate questions at the EGMs. While the court’s decision on the Penang EGM will only be known one day before the date of the EGM, minority shareholders are advised to ensure that the relevant proxy forms for the respective EGMs are submitted to the relevant parties not less than 48 hours before the time of the EGM. MSWG strongly urges minority shareholders to attend in person or by proxy at the Penang EGM and the KL EGM respectively to exercise their rights as shareholders of the Company. On which one they should attend in person, unfortunately, is a choice they have to make.
Abdul Wahab Jaafar Sidek
Chief Executive Officer
Minority Shareholder Watchdog Group (MSWG)
Dated: 22 January 2008
22 January 2008
The fight for the control of Golden Plus Holdings Berhad (GPlus) surfaced in late 2007. Many minority shareholders are now in a state of anxiety and confusion.
Background
On 27 December 2007, Indian Corridor Sdn Bhd (Indian Corridor) and Pembangunan Qualicare Sdn Bhd (Pembangunan Qualicare), the new shareholders who hold 18.6% and 1.15% interest respectively in GPlus served a Special Notice on GPlus and requisitioned for an extraordinary general meeting to be held on 26 January 2008 in Penang to seek shareholders’ approval for the removal of all six current directors in GPlus (Penang EGM).
On 9 January 2008, the Board of Directors of GPlus contested against the Special Notice and called for a separate EGM of the Company to be held on the same day and time in Kuala Lumpur (KL EGM). The agenda of the KL EGM is to get shareholders’ approval to pass an ordinary resolution to determine the validity of the Special Notice served on the Company on 27 December 2007.
The new shareholders of GPlus, particularly Indian Corridor as a major shareholder expressed unhappiness over the management agreement signed between a subsidiary of GPlus, Yanfull Investments Ltd (YIL) and China Idea Development Ltd (CIDL). The CEO of Indian Corridor had publicly voiced his unhappiness over certain terms of the agreement such as the reimbursement rate by CIDL to YIL for the sale of the Royal Garden residential project in Shanghai which he felt to be substantially lower than the market rate.
The current Board of GPlus had on 16 January 2008 filed an application for an injunction against Indian Corridor and Pembangunan Qualicare to restrain them from convening and proceeding with the Penang EGM. However, the court hearing of the Company’s application for the injunction was adjourned yesterday to 25 January 2008, a day before the respective EGMs.
Views of MSWG
It remains uncertain as to the reasons for holding the EGMs on the same day and time. The two EGMs are separate events which can cause confusion to minority shareholders who have to choose one EGM over another. Having two concurrent EGMs is against the spirit of best practice as it deprives the minority shareholders from attending the two EGMs in person.
The current Board of GPLus also called a public forum at the SC on 18 January 2008. MSWG is of the view that this unprecedented move reflected the unclear stance of the Board although an EGM would be the more appropriate platform to do so. Minority shareholders questioned whether the Board had rightly spent the money for the public forum. In addition, the non-presence of the major shareholders (albeit sending a legal representative) rendered the public forum unfruitful. Minority shareholders present were unable to obtain the first-hand views between the disputing parties.
The minority shareholders are advised to follow closely the developments of the boardroom saga as published in the press and announcements via Bursa Malaysia. They need to obtain a better understanding of the matter and be able to raise appropriate questions at the EGMs. While the court’s decision on the Penang EGM will only be known one day before the date of the EGM, minority shareholders are advised to ensure that the relevant proxy forms for the respective EGMs are submitted to the relevant parties not less than 48 hours before the time of the EGM. MSWG strongly urges minority shareholders to attend in person or by proxy at the Penang EGM and the KL EGM respectively to exercise their rights as shareholders of the Company. On which one they should attend in person, unfortunately, is a choice they have to make.
Abdul Wahab Jaafar Sidek
Chief Executive Officer
Minority Shareholder Watchdog Group (MSWG)
Dated: 22 January 2008
