KUALA LUMPUR (Dec 18): South Malaysia Industries (KL:SMI) insisted again on Wednesday that no extraordinary general meeting (EGM) of the company will take place on Jan 9, amid ongoing clashes between two shareholder groups vying for control of SMI.
This comes a day after Velocity Capital Sdn Bhd, which had called the EGM on behalf of Target 1 Sdn Bhd — the largest shareholder with a 30.67% stake — placed an advertisement in the New Straits Times notifying shareholders of the EGM.
In a bourse filing, SMI said it deemed the advertisement as “misleading the public and shareholders” and clarified that no official EGM notice has been circulated to shareholders as required under Section 321 of the Companies Act 2016 and the company’s constitution.
SMI further noted that the Securities Commission Malaysia (SC) has yet to respond to its request for a review of the decision granting consent for the appointment of six new non-independent directors, while several related lawsuits and injunctions are still pending court decisions.
The company thus emphasised that no valid EGM will take place on Jan 9, until a proper notice is issued to shareholders and the courts have ruled on the outstanding suits and injunctions.
Target 1, along with Honsin Apparel Sdn Bhd and HiQ Media (M) Sdn Bhd — which collectively control a 50.05% stake in SMI — entered into a collaboration agreement on Aug 20 to jointly exercise their voting rights and gain control of SMI’s management and subsidiaries, triggering the mandatory takeover offer at 45 sen per share.
Honsin and HiQ Media are 100%- and 51.91%-owned, respectively, by Techbase Industries Bhd (KL:TECHBASE).
A week later, Mah Sau Cheong, who holds a 7.65% stake in SMI, filed an interim injunction to block the offer, citing alleged manipulation of SMI shares, a claim he made in a lawsuit against SMI, Techbase and YB Ventures Bhd (KL:YB) in July 2024.
On Nov 22, Velocity Capital, on behalf of Target 1, called for an EGM to appoint six new directors, including former Perak police chief Datuk Mior Faridalathrash Wahid, She Pei Sze, Lee Keng Fatt, Datuk Sok One Esen, Ho Pui Hold and Leong Weng Loong. Velocity also filed a lawsuit seeking to restrain SMI and its board from disrupting the EGM or appointing new directors until the EGM is concluded.
SMI’s board subsequently requested a review from the SC regarding the appointment of the six directors before the takeover offer documentation was circulated.
On Tuesday, Mah filed another interim injunction to block both the EGM and the takeover offer, pending the outcome of his complaint with the SC. He also sought to prevent any resolution related to board appointments or removals during this time.
SMI owns Menara SMI, a 15-storey office tower on Lorong P Ramlee in Kuala Lumpur, and operates 2,230 car park bays in Kelana Square and 1,227 bays in Zenith Corporate Park, Kelana Jaya.
SMI shares closed unchanged at 40 sen on Wednesday, giving the company a market value of RM83.98 million.