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Hostile Takeover
Drama avoiding Mandatory General Offer
PETALING JAYA, MALAYSIA, 11 September 2015 - Wintoni Group Bhd EGM
held on 11 September 2015 ended according to law by noon. With new directors appointed a day before EGM,
means the EGM is academic, and 1 invalid resolution lapse, the chairman started and closed the meeting on time, there is no other official meeting the session onward. The board calls for
majority shareholder Yap Kok Weng and others working in concert to fulfill
mandatory general offer requirement, with evidence of potential law breaking, including share price manipulation and insider trading.
The evidence appears involvement of SP Setia Bhd, another public listed
company’ staffs on duty, as well as their former staffs which currently
employed under Tan Sri Liew Kee Sin, the former chief of SP Setia, now chief of
Eco World Development Group Bhd, all of which appears to be organized and
attempted takeover by avoiding mandatory general offer.
The new board was appointed by the old board 1 day before
EGM today. Subsequently after appointment of new directors Yesterday, same day
its chairman Datuk Khairuddin Mat Yusof, together with two executive directors,
including Datuk Tey Por Yee, plus four independent directors and chief
executive officer Choong Siew Meng, have all resigned.
The new directors appointed
includes former Agriculture and Agro-based Industry deputy minister Datuk Seri
Mohd Shariff Omar, together with six directors and two executive directors to
the board. These directors includes the 3 nominated by Yap Kok Weng group,
namely Datuk Jalaldin Hussain, Chaang Kok Fai and Anita Chew Cheng Im.
Official results were published on Bursa Malaysia:
http://www.bursamalaysia.com/market/listed-companies/company-announcements/4865785
Corporate Governance presented at utmost International Level.
Asian companies are known to be family ran and applies private rules, basically no rules. Mom and pop business owners and investors take owners or shareholders as the only law above all. Some miss understood the power of shareholders, as if raid and scrap public listed companies as they wish is the ultimate power they possess. That is the reason why laws came in, such as take over code or mandatory general offers were set up to protect the "stakeholders interest", not purely "shareholders interest". Text book as it is, even third world countries best company secretary or lawyer with PHD may not understand or know how to exercise their rights professionally. Sentiment play is of challenge when comes to law.
Today, the stress test of Malaysian corporate governance has moved to new level, where board of directors exercised their rights for the interest of stakeholders, not just selective hostile shareholders. The meeting closed professionally by chairman. Similar to matured capital markets, the shareholders, the board and the management are supposed to be independent. There were incidence in matured markets where hostile competitors buying and holding controlling stakes in other public listed company, without clear and convincing business plan on table, were not allowed to replace any of the board members or restricted by law from seeking unfair change of control, especially hostile or unfriendly method, which could jeopardize business survival, if proven would deem oppressing "stakeholders" interest. This concept had evolved further in UK and USA, where board of directors were given independent rights, so as management team, as well as in certain industries, "founders" of the company, especially IT companies like Facebook or Google (Wintoni Group is an IT company), where core asset is the executive directors themselves, and survival of the companies is the board of directors and the management.
Today, Wintoni Group board of directors had presented and exercised their right and duty to the utmost standard, something new to Malaysian standard of corporate governance. As shallow as it is in many investors mind, this incident would be a good text book material to nurture Malaysian capital market to match with international standard of understanding what is the spirit of corporate governance. Job well done!
Official results were published on Bursa Malaysia:
http://www.bursamalaysia.com/market/listed-companies/company-announcements/4865785
Corporate Governance presented at utmost International Level.
Asian companies are known to be family ran and applies private rules, basically no rules. Mom and pop business owners and investors take owners or shareholders as the only law above all. Some miss understood the power of shareholders, as if raid and scrap public listed companies as they wish is the ultimate power they possess. That is the reason why laws came in, such as take over code or mandatory general offers were set up to protect the "stakeholders interest", not purely "shareholders interest". Text book as it is, even third world countries best company secretary or lawyer with PHD may not understand or know how to exercise their rights professionally. Sentiment play is of challenge when comes to law.
Today, the stress test of Malaysian corporate governance has moved to new level, where board of directors exercised their rights for the interest of stakeholders, not just selective hostile shareholders. The meeting closed professionally by chairman. Similar to matured capital markets, the shareholders, the board and the management are supposed to be independent. There were incidence in matured markets where hostile competitors buying and holding controlling stakes in other public listed company, without clear and convincing business plan on table, were not allowed to replace any of the board members or restricted by law from seeking unfair change of control, especially hostile or unfriendly method, which could jeopardize business survival, if proven would deem oppressing "stakeholders" interest. This concept had evolved further in UK and USA, where board of directors were given independent rights, so as management team, as well as in certain industries, "founders" of the company, especially IT companies like Facebook or Google (Wintoni Group is an IT company), where core asset is the executive directors themselves, and survival of the companies is the board of directors and the management.
Today, Wintoni Group board of directors had presented and exercised their right and duty to the utmost standard, something new to Malaysian standard of corporate governance. As shallow as it is in many investors mind, this incident would be a good text book material to nurture Malaysian capital market to match with international standard of understanding what is the spirit of corporate governance. Job well done!
"Yap and group of investors working in concert combined purchased exceeded 40% shareholding of Wintoni Group shares attempted to bulldoze the public listed company board by calling an EGM and lost the day. The hostile group was dismissed and asked to perform their duty using proper legal method, such as Mandatory General Offer, with the Chairman elaborated professional board room protocol and defended board duty and responsibility to take care of stakeholders interest, not just selective shareholders interest. The drama demonstrated a new level of corporate governance professionalism in Malaysia towards International standard."
Swallow a tiny ACE company by breaking all laws, at all cost?
Wintoni, a smallish ACE board IT company which turns
profitable after new management came in 2 years ago, was voted no confidence
last AGM in June 2015 by a group of dubious shareholders, led by Raymond Yap Kok Weng
of SP Setia Bhd, along with dozens of SP Setia existing or former staff.
Reliable sources investigated by Wintoni Group company consultant have collected potential evidence
of over 43% shareholding by parties working in concert, a potential breach of
mandatory general offer rules (MGO). Subsequently the calling of EGM on 11
September 2015 further confirms the dubious action called by same group of
people in different combination of attendance outfit-in-disguise, suspected to avoid certain rules
with the purpose of removing all existing board of directors, which potentially
deem breach of takeover code. The removal is also in breach of Company Act and
Wintoni Group Article of Association where at any point the company must maintain
at least 3 directors.
According to a senior banker, potential breaches include
insider trading, share price manipulation, breach of takeover code, breach and
avoidance of general offer rules, breach of Company Act, and attempted minority oppression. Yap and group gets it all. “It’s potentially a big scale organized
crime, all in one package drop in the basket delivered to the door front of
Bursa Malaysia and Securities Commissions. Full stop“, commented a banker.
Market Manipulation for
the purpose of Character Assassination conspiracy?
According to similar precedence in market manipulation suit,
the authority may pursue a civil penalty potentially in millions of Ringgit from
each of them. The authority may also seek for every member of the group acting
in concert to be barred from being directors of public-listed companies and
from trading on the stock exchange for a period of certain years. In matured International capital markets, shares held by the group would be restrained from voting for the same period.
“Even if Raymond Yap and group found money to pursue
mandatory general offer (MGO), or some back stage funder is to emerge to save
the day, they may not be able to undo the potential breaches.” commented a
lawyer. “The parties working in concert knew each other and work for same
company, they bring a long family member and business associates to buy the
shares, using same law firm to conduct plans for the potential takeover
attempt, voted the same pattern and vote again in same manner by calling an
EGM. It is reckless and bold, well planned but poorly executed. This is suicide
boomer and it blown up today. It’s got nothing to do with the business as the
company was way much worst off until recently. Why now? Each of them has to find a good reason to explain themselves out.”
It doesn’t surprise the lawyer if there is other intention
behind the scene. According to a senior brokerage firm dealer, there are more
than few hundred semi-dormant or non performing public listed companies in
Bursa Malaysia. Many of those came with significantly undervalued property and
tangible assets, and could be taken over at much lower cost. With so many
better options, the kind of money spent by Yap and parties working in concert likely to burn tens of
millions of Ringgit looks suspicious. “It would be insane to even consider
Wintoni as merger & acquisition target. It’s not even qualified for
investment, not to mention a hostile takeover candidate. It’s an IT company
with no tangible assets, and the way these investors spooked and scared away
the staff and customers in last AGM, and now intended to fire the entire board which brought the
company to profitability after years of losses, does not makes sense. The company may
collapses to ashes!” “Unless the money they spent is not their own, nobody
would hostile and burn an investment this way. Pity the thousands of innocent
minority shareholders being sacrificed by these strange investors.”
Refers to Bloomberg share record, Wintoni share price had
over a short period from February 6, 2015 to March 16, 2015, actively
transacted by the group, causing the price of the shares to artificially
rise from 7 sen on February 6, 2015 to a
high of 42.5 sen on March 16, 2015.
Syndicated conspiracy
planting seeds of turbulence
There seems to be a pattern of consistent attack on Dato
Larry Tey Por Yee (Dato Larry) group of companies, trails back to August 2014,
a mysterious allegation of dubious transactions was instigated by Dato Chong
Ket Pen (Dato Chong), the MD and Vice Chairman of Protasco Bhd. This is how it
all started. Coincidentally, Wintoni Group Bhd investor, and now single largest
shareholder, Raymond Yap Kok Weng (Raymond Yap) was reportedly first entry into
Wintoni shares in August 2014.
Lead by Dato Larry team, evidence of good performance such as turning a lost making
company profitable, winning of business contracts and other positive performance
were over shadowed by suspicious "planted" negative public relation, causing normal
business associates threaten by flying letters and allegations. This Yap group drama would coincidentally fits right into such conspiracy pattern, leaving clear systematic trails of evidence.
The moda operandi of the interest parties behind the scene
is not without faults. The consistent patterns of “artificial turbulence” being
systematically created or instigated by certain interest parties targeting Dato
Larry and his companies, was told always coincidentally came along with dubious
flying letters with all kinds of allegations sent to authorities such as Bursa and Security
Commissions, and so on, on routine basis. Also coincidentally, certain targeted
press editors would receive complains from some sort of concerned investors or
anonymous letters also full of strange allegations usually targeting (you name
it) Dato Larry and his companies few days before or after any major public
listed company announcement or events. These attacks are meant to consume the
businessman resources, in other words, affecting the PLCs day to day operation
for the puppet masters. According to Wintoni Group public relation consultant,
“These time-consuming and non-productive initiatives were so systematical
organized, it basically being crafted out of nut house with the purpose to
create the image of instability, irregularity and perception shaping of
potential questionable business activities. In other words, these are man-made
turbulence with purpose of character assassination, a crime itself by law. Coincidentally every time
such event happens, biased information would comfortably land on media table in
negative summary. Such public relation trick is consistently pushed through over
the year since August 2014, if aggregated would form a clear pattern of media abuse and use editors
hand as poison pen. I rest my case.”
Wintoni was making losses for years until last board of
directors came in and turn around the business and delivered a profitable year,
and recent AGM abnormal entry of Yap and group have caused the company to lost
customers and turn downhill last quarter.
According to reliable share registrar sources, Raymond Yap Kok Weng of SP
Setia came into picture in August 2014, the same month Protasco Dato Sri Chong
ket Pen and Dato Larry Tey Por Yee broke up and went into board room fight
subsequently. Ever since, Dato Larry businesses started to receive massive
turbulence, until current Wintoni drama.Few days earlier, coincidentally Dato Sri Chong Ket Pen public relation campaign was seen on smallish newspaper Malay Mail, twice on 8 and 9 September 2015, riding on Protasco CSR work (http://www.themalaymailonline.com/malaysia/article/protasco-continued-aid-to-last-years-flood-victims, http://www.themalaymailonline.com/malaysia/article/protasco-presents-six-houses-to-families-affected-by-kelantan-floods).
The EGM drama seems to be a starter plate unwinding the conspiracy scam started by some interest parties. Let the show begins, and we respect the maturing understanding and practice of International level of corporate governance, at least trying to match Australia level, before exploring UK or USA standards, where Classes of shares is allowed. That is another academic discussion all together.
NY, 1.15
NY, 1.15
