This article first appeared in The Edge Malaysia Weekly on May 6, 2024 - May 12, 2024

On May 1, Leow Thang Fong took over as CEO of South Malaysia Industries Bhd (SMI).

The 72-year-old, who was an executive director of SMI from September 1994 to end-March this year, has a wealth of experience. He was an accountant with Hanafiah Raslan & Mohamad, and had stints at Chartered Merchant Bankers Malaysia Bhd, Asian Pac Holdings Bhd and Gula Perak Bhd.

While Leow’s experience and calibre may not be in dispute, his return to SMI as CEO after shareholders voted him out as an executive director in March is rather surprising.

How can the directors of SMI — which is a developer and car park manager, among other things — claim to have good corporate governance practices when the views and decisions of its shareholders in a voting exercise are not adhered to?

It does not matter that Leow’s re-election as a director was narrowly thwarted, with 51.22% of shareholders voting against it and 48.78% voting for it.

Among the other resolutions that were rejected were the payment of benefits to non-executive directors amounting to RM655,000 and the authority to allot and issue new shares. Does SMI plan to reverse these as well?

Why bother with the voting process and an annual general meeting (AGM) if the views of shareholders are not taken into account?

It would be a different matter if SMI was producing stellar results and paying strong dividends, but it has in fact suffered 10 straight quarters of losses.

The company has to explain why it appointed Leow as CEO in blatant disregard of the decision by the majority of shareholders at the AGM.

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