KUALA LUMPUR (March 11): NexG Bhd (KL:NEXG), which holds government contracts for Malaysian passports and ID cards, said on Wednesday that six directors, whom executive chairman and chief executive officer Datuk Abu Hanifah Noordin had sought to remove, resigned en masse effective immediately.
NexG also announced that the board had resolved to reinstate the executive powers and functions of Hanifah immediately — barely a week after his suspension.
The six directors stepping down were Syed Farid Syed Ahmad Al-Attas, Kunal Tayal, Aswath Ramakrishnan, Mohd Zafil Ibrahim, Mohamed Fairuz Mohamed Fauzy and Badrul Hisham Abdul Aziz, all citing “to pursue other interests", according to a filing with Bursa Malaysia.
They are among the seven directors that Hanifah, Velocity Capital Sdn Bhd, and Siti Nur Aishah Ishak — who collectively hold at least 10% of the company — had sought to remove via an extraordinary general meeting (EGM) to appoint eight new directors.
The seventh director proposed for removal, executive director Datuk Chong Loong Men, stepped down on March 8.
Executive directors Datuk Ab Hamid Mohamad Hanipah and Erna Ismail are still on the board, according to the company's website.
In a separate filing on Wednesday, NexG said the reinstatement of Hanifah follows further deliberation by the board and after taking into consideration the recent progress of the review process.
It remains committed to strong corporate governance, accountability and transparency, and will continue to ensure that the ongoing review is conducted according to its governance procedures and standard operating practices.
The company's board of directors suspended Hanifah on March 5 amid a review of its investments in other public-listed companies, "to allow the committee and its advisers to continue their work without undue influence".
Tussle follows emergence of Ishak Ismail-linked Raya Aviation
NexG has been embroiled in a boardroom tussle following the emergence of Raya Aviation Holdings, linked to Datuk Ishak Ismail, as its largest shareholder.
On March 5, NexG said it had appointed an external professional to verify shareholding changes related to Raya Aviation’s acquisition of a 20.4% stake through the takeover of two private companies — Skyelimit Alliance Sdn Bhd and Trendtrove Tradin Sdn Bhd.
Following this, the board of directors suspended Hanifah on the same day, prompting him and Siti Nur Aishah to seek legal recourse to block the suspension and maintain the board and management structure ahead of their requisitioned EGM.
Hanifah previously claimed that his suspension occurred after he objected to the board’s proposal to subcontract the company’s government contracts to third parties.
NexG currently holds RM2.46 billion worth of contracts for the supply of Malaysian passport booklets and identity cards.
Hanifah, in a response to his suspension, also claimed that several former directors, independent directors, and key management officers were “forced to leave their positions under circumstances that raised serious concerns with the company”.
Shares in NexG rose half a sen, or 1.8%, to 28.5 sen ahead of the announcement, giving it a market capitalisation of RM1.06 billion.