KUALA LUMPUR (Oct 23): Zen Tech International Bhd (KL:ZENTECH) said it has been sued by a shareholder of its former associate, Galactic Maritime (M) Sdn Bhd, over a shareholding dispute.

The company, along with three others, was sued by Yang Xiaowen, who holds a 20% stake in the dredging and land reclamation services company Galactic Maritime, over an alleged unlawful reduction in her shares, according to an exchange filing on Thursday.

Yang claims her shareholding in Galactic Maritime was “unlawfully reduced” from 5.265 million to 2.7 million, with 2.565 million allegedly transferred without her knowledge or consent.

She cited a public announcement on Jan 19, 2017 by Zen Tech (then known as INIX Technologies Holdings Bhd) that stated a share sale agreement was inked between them, where Zen Tech was to purchase her 2.565 million shares for RM4.56 million in cash.

“However, [Yang] claimed that she had never signed any share sale agreement or share transfer forms in relation to the said transfer.

“The plaintiff further claims that the share transfer was thus carried out without her knowledge or consent,” Zen Tech said.

The deal with Yang had increased Zen Tech’s stake in Galactic Maritime to 49%.

Zen Tech sold its 49% in Galactic Maritime in mid-2019 for RM3 million to Sun Guilong, then citing “unsatisfactory financial results”.

No damages have been claimed under the suit thus far, as Yang is seeking pre-trial discovery — parties exchange information on evidence that will be presented in court.

Zen Tech noted Yang’s affidavit indicates she intends to consider initiating proceedings after reviewing requested documents — corporate, financial and share-related records of Galactic Maritime and documents related to the alleged share transfer.

“If such proceeds are filed, potential liability could include a monetary exposure arising from claims relating to the alleged share transfer valued at RM4.56 million as stated in the 2017 announcement, or other remedies such as the return of shares, as well as legal and compliance costs incurred in contesting the discovery application and any subsequent litigation,” the company said.

Zen Tech said it has instructed its solicitors to contest the matter to defend the company’s interests.

Shares in Zen Tech ended half a sen or 50% lower at half a sen on Thursday, valuing the company at RM15.69 million.