KAJANG (Sept 29): Apex Equity Holdings Bhd shareholders have rejected the proposal of a general mandate for issuance and allotment of new shares during the group’s extraordinary general meeting (EGM) on Thursday.
On top of that, shareholders also blocked the resolution for payment of directors’ fees to non-executive directors who were appointed after the group’s annual general meeting (AGM) in June; and a proposed alteration of the company’s existing memorandum and articles of association (M&A).
Note that two substantial shareholders of Apex Equity — namely Fun Sheung Development Ltd (15.8% stake) and Yenson Investments Ltd (5.2% stake) — had filed a lawsuit last Friday (Sept 23) to stop the tabling of a resolution seeking the approval of a mandate to allot and issue new shares.
However, the High Court had on Wednesday dismissed these shareholders’ application to restrain Apex from tabling the said resolution during the EGM on Thursday.
Although the High Court has not made a decision on whether the mandate to issue new shares is in violation of the Companies Act 2016, the outcome would be academic given that the resolution was rejected at the EGM. The High Court had previously fixed Sept 29 as the case management date.
“It appears that parties from Fun Sheung and Yenson had rejected the three resolutions today,” said a shareholder who attended the EGM.
“With today’s EGM outcome, those non-executive directors appointed on June 20 would have no remuneration. Executive directors would be remunerated in accordance with their service contracts,” he said, but declined to be named.
Fun Sheung and Yenson are said to be linked to the family of the late Lim Siew Kim, daughter of the late Genting Group’s patriarch Tan Sri Lim Goh Tong.
Minority shareholders, led by Fun Sheung, have blocked several Apex corporate proposals in the past, including the proposal to adopt a new constitution for the group to comply with the Companies Act 2016.
Siew Kim was also the sister-in-law of the late Chan Guan Seng, a seasoned stockbroker who was the founder and former executive chairman of Apex.
A few months before Chan’s passing, in September 2017, he sold a block of shares to ACE Investment Bank Ltd, which subsequently emerged as a major shareholder of Apex with a 25% stake.
Between June and July 2019, ACE Investment Bank transferred its entire stake in Apex to its sister company ACE Credit (M) Sdn Bhd, which then pared down its shareholding to 14.98%.
ACE Investment Bank was set up by ACE Holdings Bhd. The investment bank is licensed under Labuan Financial Services Authority to extend credit facilities, provide consultancy and advisory services in relation to corporate and investment matters and undertake foreign exchange transactions.
On Thursday, only two of the five resolutions were passed during the EGM, namely to nullify the payment of director’s fees to incumbent managing director Datuk Calvin Choong Chee Meng and non-executive director Lee Siow Hong.
Subsequent to the EGM on Thursday, Apex executive director Lim Kok Eng said shareholders who oppose the mandate of issuing new shares should understand that it is a common practice for listed companies to obtain such a mandate.
“It is quite common for public listed companies to have a standby kind of arrangement so that in the event of expansion for example, we can actually utilise this. I think they are corporate people; they should understand that this is part and parcel of the requirement, and this is only a mandate, it is not actually an issuance yet,” he told theedgemarkets.com here.
The 56-year-old also said while the business outlook for the stockbroking business is gloomy, the current management has a diversification plan in place to chart the future growth of Apex.
“Clearly the market is not doing so well, so it indirectly impacts quite a lot of people. But we do have plans to diversify,” he said, but declined to reveal more.
Kok Eng, along with four others — deputy group managing director Datuk Leong Wai Leng, non-executive chairman Datuk Ahmad Redza Abdullah, non-executive directors Woon Wai En and Rozana Shamsuddin — were appointed to the Apex board on June 20.
With the latest boardroom changes, at least three of seven directors are linked to ACE Holdings Bhd or its group of companies.
Kok Eng is currently chairman of the audit committee in ACE Investment Bank Ltd and independent non-executive director in ACE Money Exchange Sdn Bhd where his roles broadly include improving corporate credibility and governance standards functioning and playing a vital role in risk management.
Shares of Apex closed unchanged at RM1.02 per share on Thursday, giving it a market capitalisation of RM217.83 million.