KUALA LUMPUR (July 18): Pestec International Bhd (KL:PESTEC) has resolved to remove its group chief executive officer Lim Pay Chuan from office effective immediately after he refused to return to work.
Lim will be redesignated as a non-executive director, Pestec said in an exchange filing. The decision on his position was made after “due consideration” by its board of directors during a meeting on Thursday, July 17, the company noted.
“The board wishes to assure all its shareholders and other stakeholders that this will have no impact on the group’s operations,” Pestec said.
The decision was made after he declined to resume his duties at the company during a reconciliation attempt on Monday, by the Selangor Industrial Relations Department and attended by both Pestec’s representatives and Lim.
The meeting followed a representation filed by Lim on July 2 under Section 20 of the Industrial Relations Act 1967 which largely deals with unfair dismissals. Pestec issued a reply on the same day, denying the allegation of constructive dismissal and requested that Lim returns to work.
The matter started after he alleged that he was “constructively dismissed” in a July 1 letter to Pestec.
“The company categorically denies Lim’s allegation of constructive dismissal and reserves all its rights in this regard,” Pestec said on Friday.
On June 11, Lim ceased to be a substantial shareholder following a restricted share issue announced on March 10, which involved the issuance of 231.79 million new shares. The exercise diluted his direct shareholding from 4.97% to 4.52%, while his indirect stake decreased from 0.06% to 0.05%.
Pestec separately announced that Lim Ah Hock, his uncle and the company’s deputy chairman, has been re-designated as a non-executive director beginning Thursday. No reason was provided.
The company has been loss-making and twice switched its financial year end in the past two years. For the 12 months ended Sept 30, 2024, the company reported a net loss of RM193 million.
Shares of Pestec were up half a sen or 3.5% to 15 sen at the midday break on Friday, giving the company a market capitalisation of RM383.6 million. The counter has fallen over 30% year-to-date.