KUALA LUMPUR (June 11): Shareholders of Warisan TC Holdings Bhd (KL:WARISAN) have rejected several proposed recurring related-party transaction (RRPTs) mandates involving APM Automotive Holdings Bhd (KL:APM) and Tan Chong Motor Holdings Bhd (KL:TCHONG), and its own directors and major shareholders, at the company’s 29th annual general meeting (AGM) on Thursday.
The result mirrors similar actions by shareholders at APM Automotive’s AGM a day earlier on Wednesday (June 10).
According to a bourse filing, 24 shareholders holding 64.9209% of voted shares rejected a shareholders’ mandate for RRPTs with Tan Chong and its subsidiaries worth an estimated RM308.96 million. Another 25 shareholders holding 35.0791% of the voted shares voted for it.
The proposed transactions with Tan Chong included mostly the procurement of goods and services, which are for the purchase of motor vehicles, spare parts and maintenance services for Warisan TC’s travel and car rental business, estimated at RM114.7 million, as well as assembly and agency services for passenger vehicles estimated at RM81.3 million and RM44 million respectively.
Warisan TC had proposed to continue renting space at two properties in Petaling Jaya and Seri Kembangan to Tan Chong, estimated at RM240,000. Rental expenses across 27 properties nationwide were estimated at RM1.63 million.
Another resolution covering RRPTs with APM Automotive and its subsidiaries worth an estimated RM185.67 million was similarly voted down, with 23 shareholders holding 64.9186% of voted shares opposed to this. The bulk of the proposed APM transactions comprised procurement of spare parts and components for Warisan TC’s equipment and machinery business, estimated at RM179.35 million. Income-side transactions included vehicle sales, equipment rental such as forklifts, and travel and car rental services, with Warisan TC also renting factory and office premises in Seri Kembangan from APM at RM340,000.
A resolution which proposed a mandate for RRPTs with directors and major shareholders of Warisan TC and persons connected with them, estimated at RM231.26 million, was also rejected. The mandate was centred almost entirely on the procurement of completely built-up and locally assembled vehicles, spare parts and related services from Auto Dunia Sdn Bhd, a company connected to the company’s largest shareholder Datuk Tan Heng Chew and director Datuk Abdullah Abdul Wahab, estimated at RM231.15 million. Smaller items included digital marketing services from Rebel Motion Sdn Bhd, a company linked to Heng Chew’s daughter, and rental of a vacant land in Sandakan.
Heng Chew is president of Warisan TC, APM Automotive and Tan Chong Motor, and a shareholder of Tan Chong Consolidated Sdn Bhd, the largest shareholder in all three companies. Heng Chew owns a 5.969% direct stake in Warisan TC and a 42.772% indirect interest through Tan Chong Consolidated and Wealthmark Holdings Sdn Bhd.
In the bourse filing, Warisan TC said the RRPTs were for the long-term benefit of the group, with the related parties representing an existing market with reliable payment terms. The company said sales to related parties contribute to higher turnover, trading volume and better bargaining power with vendors, consistent with its objectives of brand building and market expansion. The board, except for Heng Chew and Abdullah, had recommended that shareholders vote in favour of all three mandates.
Shareholders approved the re-election of Heng Chew with 74.92% support, while the re-elections of Tan Keng Meng and Chin Ten Hoy received more than 80% support. The reappointment of Forvis Mazars PLT as auditors was approved by 97.96% of voted shares.
Warisan TC’s major shareholders also voted not to tighten governance or change how it handles pay, capital or related-party risks. There were four additional resolutions covering remuneration committee reconstitution, an independent review of asset disposals, a capital allocation framework disclosure,and a conflict of interest governance framework, which were also voted down, each rejected by 30 shareholders with 61.9691% of voted shares. Some 35 shareholders with 38.0309% voted shares voted for the resolutions.
A total of seven out of 15 resolutions were rejected at the AGM.
The outcome at Warisan TC’s AGM echoes results from APM’s AGM on June 10, where shareholders voted down proposed RRPT mandates with Tan Chong and Warisan TC worth over RM265 million.
Warisan TC’s AGM comes a day ahead of Tan Chong’s AGM, scheduled for Friday (June 12).