KUALA LUMPUR (June 26): All four resolutions proposed by the board of directors of South Malaysia Industries Bhd (KL:SMI) at its annual general meeting (AGM) on Wednesday (June 25) were rejected by proxies representing Target 1 Sdn Bhd, Honsin Apparel Sdn Bhd, and HIQ Media (Malaysia) Sdn Bhd, which collectively hold an absolute majority stake of about 50.05%.
The resolutions tabled involved the re-appointment of Messrs UHY Malaysia PLT as auditors, approval of directors’ fees and benefits of up to RM350,000 for non-executive directors of the company and its subsidiaries, the re-election of Latifah Abdul Latif as director, and the authority to allot and issue shares pursuant to Sections 75 and 76 of the Companies Act 2016.
“This decisive rejection came from proxies representing Target 1, Honsin Apparel, and HIQ Media (Malaysia), collectively holding approximately 50.05% of SMI’s shares. Given this absolute majority, the outcome of the voting was effectively determined, rendering further polling unnecessary,” said SMI in a brief statement.
Following this, and pursuant to a Kuala Lumpur High Court order dated June 20 — stemming from an application by Teh Chee Hoe to appoint himself along with Ng Fun Kim, Ling Chi Hoong, and Amy Tan Li Peng as directors — the AGM has been adjourned to a future date to be set by the court.
“This unprecedented outcome shows shareholders' concerns regarding the governance and direction of the company, marking a pivotal moment for SMI and its stakeholders,” SMI added.
SMI said it rejected a proposal to nominate Teh and three others as directors at its AGM, citing breaches of corporate and securities laws. The proposal, submitted by Teh on June 12, was deemed non-compliant with Section 323 of the Companies Act 2016, following legal advice sought during an emergency board meeting, it said.
SMI also highlighted that Teh is linked to Target 1, which launched an unconditional takeover offer for the company in August last year. Under Rule 15 of the Rules on Take-Overs, Mergers and Compulsory Acquisitions, SMI noted that nominees of an offeror cannot be appointed to the board or exercise voting rights without prior consent from the Securities Commission Malaysia and before the issuance of the offer document.