(This report replaces an earlier version which said the parties had reached an out-of-court settlement)
KUALA LUMPUR (Feb 22): Dagang NeXchange Bhd (DNeX) said a lawsuit against two of its subsidiaries in relation to a shareholders agreement signed in July 2021 was struck out on Wednesday (Feb 22) after a consent order was recorded in the High Court.
The suit was filed by Tethystronics Technologies Company Ltd (TTCL), whose application for an injunction against the two subsidiaries, DNeX Semiconductor Sdn Bhd (DSSB) and SilTerra Malaysia Sdn Bhd, was also struck out.
The consent order will be effective until the full satisfaction of any final award given to TTCL in an arbitration, or until the date of the final award if TTCL’s claims are unsuccessful, said DNeX in a bourse filing.
TTCL is a special-purpose vehicle ultimately owned by Beijing Integrated Circuit Advanced Manufacturing and High-End Equipment Equity Investment Fund Center (CGP Fund), which also holds a 40% equity interest in SilTerra. DNeX owns the remaining 60% stake in SilTerra, via DSSB.
The suit revolves around DNeX exercising its rights as a majority shareholder of SilTerra to appoint directors to SilTerra’s board via members' written resolutions (MWR), a move which was contested by TTCL.
TTCL wanted SilTerra and DSSB to be restrained from acting upon the MWR and directors’ written resolution purportedly passed on Nov 21, 2022.
It also sought to restrain SilTerra and DSSB from taking any steps towards effecting any further change in the composition of SilTerra’s board.
Another relief sought by TTCL was for SilTerra and DSSB to restore the composition of SilTerra’s board of directors to the composition prior to the appointment resolutions.
Under the consent order recorded on Wednesday, the board composition of SilTerra will remain the same as it was prior to the MWR.
In addition, the board of SilTerra will not deliberate on matters in respect of the civil suit and impending arbitrations, and is entitled to convene subsequent meetings concerning other matters related to the company.
DNeX’s shares experienced a massive selldown following the dispute with the Chinese partner over SilTerra in November 2022. The counter has regained some of its lost ground since it sank to a low of 50.5 sen on Nov 17, to close unchanged at 62 sen on Wednesday.
At 62 sen, DNeX’s market capitalisation stands at RM1.96 billion.