KUALA LUMPUR (Oct 3): The privatisation of MPHB Capital Bhd (KL:MPHBCAP) has been met with a stumbling block put up by ISM Sdn Bhd, which is the company's minority partner in six joint-venture companies.
In a filing with Bursa Malaysia on Thursday, MPHB said ISM had filed an intervening application on the grounds that the proposed selective capital reduction — which is part of the privatisation exercise — would affect ISM’s rights against MPHB in relation to an ongoing contentious shareholder dispute between the two parties and MPHB's subsidiaries.
The MPHB's subsidiaries, which were also JV companies with ISM, are Multi-Purpose Shipping Corp Bhd, Queensway Nominees (Asing) Sdn Bhd, Queensway Nominees (Tempatan) Sdn Bhd, West-Jaya Sdn Bhd, Mulpha Kluang Maritime Carriers Sdn Bhd and Leisure Dotcom Sdn Bhd.
Following this, the High Court has fixed a hearing date for the intervening application on Dec 3, 2024.
According to MPHB's latest annual report, ISM had filed five suits against the company and the aforementioned subsidiaries, alleging minority shareholder’s oppression under Section 181 of the Companies Act 1965. ISM is a minority shareholder of the subsidiaries.
In the five suits, ISM seeks damages, both general and punitive against the defendants, several declarations regarding the manner in which the affairs of the company and subsidiaries are conducted, several injunctions to restrain the conduct of the company with regards to the subsidiaries as well as an order that ISM’s shares in the subsidiaries are to be purchased by the defendants at a value to be fixed by an independent auditor and valuer.
In response, the defendants contended that ISM is in breach of the joint venture arrangement between the parties in failing to fulfil its financial obligations. The case was noted to still be ongoing.
MPHB in May announced that its controlling shareholder and chairman Tan Sri Surin Upatkoon planned to take the credit services provider private through a selective capital reduction totalling RM748.11 million.
Entitled shareholders will receive RM1.70 per share under the capital repayment proposed by Upatkoon and his family, who together control 43% of MPHB.
Under the exercise, Upatkoon is offering a capital reduction and repayment of RM1.70 apiece on 440.07 million shares, or a 62.68% stake, not held by his vehicles Case Management Sdn Bhd (CMSB) which owns a 32.92% stake, and MWE Holdings Sdn Bhd (4.4% stake).
As the capital repayment totalling RM748.11 million involves a sum higher than MPHB’s share capital of RM725.09 million, a bonus issue of 146.06 million shares by way of capitalising RM123.02 million of the group’s retained earnings is proposed.
Shares of MPHB were down eight sen or 4.76% to close at RM1.60, with a market capitalisation of RM1.14 billion.