South Malaysia Industries lodge complaint to SC

By RUPINDER SINGH

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 (Malaysia) Sdn Bhd to acquire more than 33% equity stake in SMIB in the last six months ended February 17, 2023. 

The property development company said it had provided documentary evidence that the parties had breached the Capital Markets and Services Act 2007 (CMSA) Section 218 (2), 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,” SMIB said in a statement today.

SIMB said 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 February 23, 2023 filed a suit at the Kuala Lumpur High Court in an attempt to compel SMIB to provide the record of depositors (ROD) as at February 20, 2023.

Honsin and HIQ had informed of their intention to call an extraordinary general meeting (EGM) to replace the entire SMIB board of five persons including all the independent directors with no justifications or reasons and 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 Eik Huang is also a director of Prolexus.

SMIB said it 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 said Honsin and HIQ’s late affidavits were affirmed by Workshire Share Registration Sdn Bhd, and Aldpro Corporate Services Sdn Bhd respectively.

Aldpro Corporate Services Sdn Bhd is the share registrar for both YB Ventures and Prolexus. 

SIMB said both registrars provided expert opinions that it is reasonable for a public listed company 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 said it found both registrars’ affidavits to be a departure from professional practice, where share registrars do not provide advice or expert opinion unless they are appointed by the public listed company or by other public listed company controlled by the same major shareholders.

“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.

“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,” SIMB said.

As at 3pm, SMIB shares gained half a sen or 0.95% at 53 sen, with a market capitalisation of RM111 million.