By RUPINDER SINGH

SOUTH Malaysia Industries Bhd (SMI) has taken legal action against its largest shareholder, Target 1 Sdn Bhd, and its representative, Velocity Capital Sdn Bhd, amid an escalating battle for control of the company.

In a Bursa Malaysia filing today, SMI announced that it had applied on December 6, 2024, to strike out Suit 557, which was initiated by Target 1 and Velocity Capital on November 22, 2024.

The suit seeks various injunctive reliefs against the company and its directors.

SMI claims that the suit is “scandalous, frivolous, vexatious, and/or obviously unsustainable” and constitutes an abuse of court process.

It further argues that the reliefs sought are overly broad, premature, and infringe on the constitutional rights of its directors under the company’s constitution.

Separate Injunction Filed to Block EGM

Additionally, SMI has filed a new lawsuit, Suit 45, on December 9, 2024, targeting Target 1, Velocity Capital, TA Securities Holdings Bhd, and Agmo Digital Solutions Sdn Bhd.

The company seeks to prevent the defendants from convening an EGM scheduled for January 9, 2025.

SMI stated that the Securities Commission Malaysia’s (SC) consent granted to Target 1 under Rule 15.01 of the Take-Overs and Mergers & Acquisitions Rules (Takeover Rules) is inconsistent with the rule’s intent, which is to safeguard minority shareholder interests and ensure board independence.

“As the SC has not responded to the company’s solicitors’ letter… the company has no choice but to file Suit 45 to maintain status quo,” SMI said in the filing.

The legal disputes have highlighted growing tensions between SMI and its major shareholder, Target 1, which recently acquired a 30.67% stake in the company.

The case management for both suits is scheduled for December 11, 2024.