KUALA LUMPUR: Techbase Industries Bhd’s (TIB) wholly-owned subsidiary Honsin Apparel Sdn Bhd (HASB), has filed a suit against the major shareholder of South Malaysia Industries Bhd (SMI) and Asian Pac Holdings Bhd for its management practices.
In a statement, HASB expressed disappointment with the current SMI board for persistent losses since 2019.
Further, given the company’s financial performance, the substantial increase in director fees for the financial year ending June 30, 2023, is disproportionate.
HASB noted that this concern follows SMI’s recent announcement of filing a judicial review against the Securities Commission Malaysia (SC).
HASB is also particularly troubled by SMI’s prolonged delay in convening an annual general meeting (AGM), which has persisted for 21 months without any public explanations to SMI’s shareholders.
“This departure from the customary 12-month AGM timeline raises serious questions about SMI’s management’s transparency and accountability.
“We are profoundly disappointed with the actions of the current SMI board. Their focus and priorities appear to be starkly misaligned with the interests of the shareholders.
“Certain decisions seem to lack transparency instead of fostering the company’s advancement.
“We hope no further delay of the AGM,” HASB spokesperson said in the statement.
The company said the actions of SMI’s directors, which undermine shareholders’ rights and erode confidence in the company’s governance, could have profound implications on foreign investment confidence in Malaysia.
Investors keenly observe corporate governance standards in public-listed companies, and any deviations from these standards can significantly impact investor sentiment, HASB noted.
Moreover, there is a pressing concern that the incumbent SMI directors have failed in their fiduciary duties by persistently delaying the AGM, thereby obstructing shareholder engagement and oversight, without demonstrating any tangible efforts to address SMI’s ongoing financial losses.
Note that HASB had previously won a case calling for an extraordinary general meeting (EGM). However, SMI has applied for a stay on the judgment, further delaying the EGM.
Additionally, SMI has applied to the Companies Commission of Malaysia (SSM) for a delay in holding the AGM without providing any reasons to the shareholders.
HASB and HIQ Media Malaysia Sdn Bhd (HMM) have filed a suit against Mah Sau Cheong and 15 others.
To note, HASB and HMM collectively own a 10.01 per cent stake in the loss-making SMI.
SMI’s ownership is spread among various owners, with BH Builders Sdn Bhd owning the largest portion, or 9.31 percent.
This company is fully owned by Asian Pac Holdings Bhd, another property developer listed on the main market of Bursa Malaysia.
“We urge all shareholders to attend and vote in the upcoming AGM to exercise their shareholder rights and express their views on the company’s management.
“We must stand together to ensure transparency, accountability, and good governance in SMI,” added HASB spokesperson.
HASB remains committed to advocating for the rights of shareholders and the betterment of SMI.
