KUALA LUMPUR (May 20): Edelteq Holdings Bhd has postponed its scheduled listing on the ACE Market of Bursa Malaysia to June 7 from May 30, after its chief executive officer Chin Yong Keong was sued by his former employer Mi Technovation Bhd for alleged breach of employment contracts and abuse of legal process.
In a statement on Saturday (May 20), UOB Kay Hian Securities (M) Sdn Bhd said investors who wish to withdraw their applications for the initial public offering (IPO) shares may submit their applications to do so from May 20 to 5pm on May 26.
Meanwhile, balloting for the shares will take place on May 30, while allotment of shares to successful applicants will take place on June 6.
"We view the litigation between [Mi Technovation] and [Chin] to be a personal matter which has nothing to do with the Edelteq Group. This announcement is made to provide additional information over and above what has been adequately provided in the prospectus," said UOB Kay Hian, which is sponsoring Edelteq in its listing exercise.
UOB Kay Hian added that the board of Edelteq, together with the due diligence working group (DDWG), found that the contents of the writ filed by Mi Technovation do not have a material impact on the financial position and operations of the group, as it concerns a personal matter between Chin and his former employer.
"[UOB Kay Hian] as the sponsor for the listing together with the DDWG are of the view that the disclosures in Section 5 of the prospectus pertaining to [Chin's] profile is factual in nature, and there are no false or misleading statements or other facts the omission of which would make the disclosure of the profile of [Chin] in the prospectus false or misleading."
On May 17, Mi Technovation announced that it was suing Chin, who was formerly its chief operating officer cum general manager, saying that Edelteq's profile of Chin, which stated that he had left Mi Technovation's employment in March 2019, was "calculated to mislead readers in that it gives the impression that there was mutual termination of his employment contract", and that it did not disclose material facts, including the repudiation of his employment contract.
According to Mi Technovation, Chin had filed for a representation for reinstatement under Section 20(1) of the Industrial Relations Act 1967, after a dispute with his former employer over his scope of work, authority and responsibility.
The company said Chin had deemed himself constructively dismissed and did not report for duty despite an independent investigative committee finding no basis for his claims and Mi Technovation ordering him to return to work.
Mi Technovation also claimed that he had withdrawn his representation in July 2019 without informing the company.
According to a timeline of events within UOB Kay Hian's statement, the Department of Industrial Relations Malaysia had written to Chin confirming that the representation was dropped and copied the letter to Mi Technovation.
As part of its IPO, Edelteq is issuing 100 million new shares, representing 18.8% of its enlarged share capital, as well as an offer for sale of 43.2 million existing shares, representing 8.1% of the enlarged shares, by way of private placement to selected investors.
Based on an issue price of 24 sen per share and an enlarged share capital of 532.5 million shares, Edelteq will have a market capitalisation of RM127.81 million upon listing.
Prior to the IPO, Chin held 58.23% of the shares in Edelteq. After the public issue and the offer for sale of existing shares, his holding in Edelteq will be diluted to 44.05%, according to the group’s prospectus.