KUALA LUMPUR (March 27): HHRG Bhd (KL:HHRG) has suspended three senior executives from its 51%-owned subsidiary, MG Furniture Sdn Bhd, who are also members of the Ch’ng family, the largest shareholder in HHRG.

The action is part of an internal investigation into the management of MG Furniture and non-compliance with board directives related to a court order.

The suspended executives are MG Furniture managing director Ch’ng Chen Mong, production manager Ch’ng Boon Sin, and finance and human resource manager Sau Hwee Fern, the Penang-based biomass material manufacturer disclosed in a bourse filing on Thursday.

Chen Mong is the head of the Ch’ng family which owns the largest stake in HHRG through the Ch'ng family’s private vehicle — Cfamillie Holdings Sdn Bhd. Boon Sin is his son.

Cfamillie Holdings’ interest in HHRG is via its trustee Digital Trustee Sdn Bhd.

Chen Mong, Boon Sin, and Sau were issued show-cause letters on March 24 and March 27, 2025, and are required to respond before the board makes a final decision

HHRG said in a filing with the bourse that the suspension will last two weeks and would not impact the financial or operational performance of the company or its subsidiary.

The suspension comes amid an ongoing legal dispute between Cfamillie Holdings and HHRG regarding MG Furniture.

Cfamillie Holdings is looking to nullify the deal which led to HHRG taking a 51% stake in MG Furniture in 2021, alleging fraudulent inducement to make the deals. HHRG has filed a counterclaim to open MG Furniture’s books for inspection alleging unapproved advances.

In the latest development on HHRG’s counterclaim, HHRG has managed to obtain an order from the Penang High Court for all records of MG Furniture to be opened for inspection by HHRG and a company-approved auditor.

Separately, Cfamillie Holdings, through Digital Trustee, is trying to remove HHRG’s board of directors via an EGM and replace them with three new directors.

The written requisition for the EGM made by Digital Trustee is to remove all five of HHRG’s directors: its executive deputy chairman Datuk Paduka Ammar Datuk Shaikh Mahmood Naim, as well as Guok Ngek Seong, Abdul Rahman Din, Chan Hon Woo and Ju Siew Lee.

To replace them, the shareholder is nominating three directors — Zam Azri Mohamed Zam Zamil, Dr Mazlan Ahmad and Low Xhu Hern.

HHRG’s board of directors earlier on Thursday said it had decided against convening the EGM requisitioned by Digital Trustee, and also filed a legal suit to stop it from being convened. The board said the resolutions proposed by Digital Trustee, if passed, would not be in the best interest of the company.

HHRG last traded at 11.5 sen a share, giving it a market capitalisation of RM110.6 million. Year to-date, the stock is down 4.17%.

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