This article first appeared in The Edge Malaysia Weekly on June 8, 2026 - June 14, 2026

A substantial shareholder of PRG Holdings Bhd (KL:PRG), Datuk Sheah Kok Fah, wants to have the company’s managing director (MD) Andrew Chan Lim-Fai removed.

On May 28, Sheah sent a special notice to PRG’s board of directors informing them of his intention to propose an ordinary resolution to remove Chan from his position with immediate effect, pursuant to Section 206 of the Companies Act 2016, at the upcoming annual general meeting on June 25.

A week later, PRG’s board announced that it had rejected the special notice. It explained in a bourse filing that the special notice was invalid as it did not meet the 28 clear days’ notice period required under the Companies Act.

Whether a special notice needs to be 28 days or 28 clear days is a matter of debate on the interpretation of the law. On the other hand, Sheah can later requisition an extraordinary general meeting to seek shareholder approval to remove the MD.

PRG, formerly known as Furniweb Industrial Products Bhd, is involved in property development, construction and the manufacturing of yarn products. The company had a market capitalisation of RM46.6 million based on share price of 9.5 sen.

What has unfolded at the loss-making company may lead investors to view it as just another boardroom tussle, in which one faction is trying to gain control from the other. Whereas others may imagine the corporate mafia making a move to take over the small-cap firm.

It is none of the above, as far as Sheah is concerned. When contacted, he says the move to oust the MD is mainly because of concerns about corporate governance at PRG.

“I am upset about the undisclosed RPT (related party transaction). This is an integrity issue,” he tells The Edge.

The RPT, which Sheah is concerned about, involved a debt settlement between PRG and Premier De Muara Sdn Bhd (PDM). PRG substantial shareholder Ng Yan Cheng has equity interest in PDM, according to a filing with the Companies Commission of Malaysia.

However, the settlement agreement was not disclosed as an RPT when it was announced to Bursa Malaysia on April 23. But in an unexpected turn of events, the board later cited RPT as one of the reasons to terminate the agreement.

PRG said it “discovered” that a major shareholder held an indirect stake in PDM, rendering the settlement agreement an RPT. The board, however, did not reveal the name of the shareholder.

PRG’s 2025 annual report shows that Yan Cheng was the largest shareholder with a 16.45% stake as at March 31, followed by Sheah (8.14%) and Wang Jin (5.78%).

Notably, Chan is the son-in-law of Yan Cheng and brother-in-law of Ng Tzee Penn, who is a former executive director at PRG.

It is hard to fathom how the board failed to realise the connection between PRG and PDM considering that the MD is a family member of Yan Cheng’s.

To recap, on April 23, PRG announced that its subsidiary Premier Construction (International) Sdn Bhd (PCI) had signed a debt settlement agreement with PDM for the partial settlement of the RM37.17 million owed by the latter.

The amount owed was for construction works at PDM’s high-rise residential project called Picasso Residence in Jalan Jelatek, Kampung Datuk Keramat, Kuala Lumpur. PCI was appointed as the main contractor of the property development.

According to the bourse filing, the proposed settlement involved a contra transfer of 12 high-rise residential units at Picasso Residence to pay back RM13.37 million. Meanwhile, the repayment of the outstanding RM23.44 million would be negotiated further.

PRG’s board terminated the settlement agreement roughly four weeks after it was signed when it realised PDM had failed to disclose a court judgment against it, and that affected its position to perform the contractual obligations under the settlement agreement.

“While the company was evaluating the regulatory compliance procedures required under the listing requirements resulting from this undisclosed RPT relationship, subsequent events of default by PDM ensued,” PRG said in the bourse filing dated May 19.

PDM wrote to PCI to inform that “it was unable to perform the obligations in the settlement agreement”.  By virtue of the letter, PRG concluded that PDM had unequivocally renounced its contractual obligations under the settlement agreement. 

The board said that having considered all aspects, the termination of the settlement agreement was in the best interests of the company.

PRG also warned of the likelihood of an impairment loss of about RM13.7 million. How the other RM23.44 million will be settled is currently unknown. 

It is understandable that other shareholders may have doubts about the company’s ability to recover the debts as the amount was owed by a major shareholder whose son-in-law is   the MD of the company.

PRG has been loss-making in four of the past five years. It posted a net loss of RM39.8 million for the financial year ended Dec 31, 2025 (FY2025) — its third consecutive year of losses, even though this loss was narrower than the RM73.2 million in FY2024. Annual revenue had also declined over the past three years. It came in lower at RM259.75 million in FY2025 from RM288.29 million a year earlier.

The company’s accumulated losses had swelled to RM63.2 million at end-2025 from RM30.9 million a year earlier. 

It is worth noting that the shareholder loans, including advances of RM47.59 million from a shareholder as at end-2025, had increased sharply to RM62.7 million from RM22.2 million at the group level. The shareholder loans bear annual interest of 4% to 6% and are payable within the next 12 months in cash and cash equivalents, the annual report shows.

In its latest quarterly financial statement, the company received another RM6.84 million in the form of a shareholder loan during the quarter ended March 31. However, PRG did not disclose the identity of the shareholder. 

Come June 25, the board of directors will face minority shareholders whom they are anwerable to. Hopefully, the board will be able to shed light on the issues and assuage any doubts the shareholders may have.

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