This article first appeared in The Edge Malaysia Weekly on August 19, 2024 - August 25, 2024

DATUK Loh Yuen Tuck, who was suspended as CEO of developer Sentoria Group Bhd (KL:SNTORIA) at the end of May and reinstated at the end of June, has stepped down, citing constructive dismissal as the reason.

Sentoria, however, has not made any announcements pertaining to Loh’s departure and attempts to contact joint managing directors Datuk Chan Kong San and Datuk Gan Kim Leong proved futile.

Loh in a brief meeting with The Edge says: “I wrote in [a July 25 letter] to the company stating that I’m departing on (reasons of) constructive dismissal. I specifically asked [the company to] announce my constructive dismissal to Bursa Malaysia but they didn’t.”

To clarify, a constructive dismissal is a situation where an employee leaves under protest due to a violation of the terms of the employment contract by the employer.

Loh, who had joined the group in January this year, was suspended on May 29 due to alleged misconduct. The company accused him of having been absent from office without notice since May 17 and of, allegedly, abusing his position or authority as well as of engaging in “other misrepresentation and irregularities”.

Loh’s suspension was supposed to have been for three months but Sentoria, on June 28, announced the end of his suspension and allowed him to resume his duties with immediate effect. The company further said that it “had decided to proceed with the enquiry and discussion internally with the affected parties to come to an amicable decision or solution in the best interests of the company”, as opposed to an earlier plan to appoint an external enquiry team slated to investigate the alleged shenanigans By Loh.

Loh says he is clueless about the specific reasons for his suspension and in a letter sent to the company, he claims that the purported areas of enquiry are vague and lacking in particulars. Loh also says he is vexed that he was not given an opportunity to counter the allegations.

“I wrote in four emails. [They] never replied to my emails and didn’t give any details [for my suspension]. And all of a sudden, they announce, come back to work immediately,” he explains.

Loh claims that his suspension was requested by the chairman of Sentoria Capital Sdn Bhd, which is the largest shareholder of Sentoria with a 35.79% stake. Not wanting to name the chairman, Loh simply refers to him as the “unnamed chairman” in his conversation with The Edge.

Sentoria Capital is controlled by Chan and Gan. After Loh’s suspension, the duo took over his duties in the company.

A search on the Companies Commission of Malaysia’s website shows that Chan and Gan are the directors of Sentoria Capital. There is no appointed chairman in the company.

Loh says he has written in to Bursa, seeking an investigation into Sentoria and also highlighting the fact that his departure resulted in the mass resignations of four independent directors — Datuk Ras Adiba Mohd Radzi, Lim Zhao Qi, Lim Poh Seong and Datuk Abdul Rahman Imam Arshad — and company secretaries, Datuk Tan Leh Kiah, Chin Lee Chyen and Lim Chien Joo, among others. He adds that the issue between him and Sentoria has been brought to the industrial court with him seeking compensation.

Loh has been involved in mergers and acquisitions and research and investment, having served firms such as Quilter Goodison London, SJ Securities, Jupiter Securities, Phileo Peregrine Securities, Sun Hung Kai Hong Kong and Robertson Stephens Inc, according to Sentoria’s 2023 annual report.

Loh does not hold any shares in Sentoria.

Soon after he became the CEO in January this year, Sentoria announced plans to raise up to RM150 million from a redeemable convertible bond (RCB) issue as the first step towards resuscitating the company’s financials. The funds raised were to be used to repay loans and finance property development projects. The company also proposed a share consolidation of every four existing shares of the group into one share.

Triton Capital Fund VCC — an entity controlled by people familiar with Loh — was to subscribe for the bonds and eventually emerge as the largest shareholder of Sentoria upon the full conversion of the bonds.

Nonetheless, on June 28, Sentoria announced that the company had not been able to obtain the consent of all its lenders, or to fulfil the conditions of conditional consent as imposed by certain lenders for the implementation of the proposals.

Loh, however, claims that this announcement was not true as the proposals had already obtained the green light from the lenders.

Now, with Loh having stepped down, the fundraising is likely to be off the table and, as a result, Sentoria’s affordable housing project in Morib, Selangor, has ceased operations, according to Loh.

“We were well on the way to reviving the company …Things were going constructively as planned, we received all the approvals for the RCB. Unfortunately, the joint managing directors had a different idea ... I can’t be specific about this,” Loh explains.

He says he had great plans for Sentoria and that his decision to take on the role of CEO was based on the company’s decent asset base.

“I think it (Sentoria) is salvageable. The plan was that we were going to have a joint venture to [revitalise] the Gambang [property development in Pahang]. We also wanted to do the same in Morib, Selangor, and Samariang, Sarawak.”

“But the whole event [his suspension and eventual departure] led to a massive deterioration … Why such a disastrous U-turn in corporate strategy when everything was laid out comprehensively?” Loh asks.

Sentoria is involved mainly in property development and leisure and hospitality. Its major facilities include the Bukit Gambang water theme park in Pahang.

Financially, the company has been in the red over the last four fiscal years. For the 18-month period ended Sept 30, 2023 (FY2023), it incurred a net loss of RM62.41 million. For the first six-month period ended March 31, 2024 (1HFY2024), its net loss stood at RM25.19 million.

When asked about the continued losses, Loh explains that after the pandemic, the company could not restart its projects and was burdened with high carrying costs, interest payments on outstanding loans and operational costs incurred by the existing businesses.

As at the end of March this year, Sentoria had RM439.3 million in borrowings and negative cash flow of RM71.4 million.

The Pahang government is the second largest shareholder of Sentoria with a 14.29% stake while Tan Wei Lian, the executive chairman of TWL Holdings Bhd (formerly Tiger Synergy Bhd) (KL:TWL) holds a 3.74% stake.

Sentoria’s share price has been on a downward trend in the last few years with a year-to-date drop of 50%. The stock closed at 45 sen last Friday, giving the company a market value of RM27.6 million. 

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