KUALA LUMPUR (June 18): PRG Holdings Bhd (KL:PRG) said on Thursday it is in the process of appointing an independent reviewer to examine a now-terminated debt settlement involving a related-party transaction (RPT) between the group’s construction unit and Premier De Muara Sdn Bhd (PDM).
The move follows PRG Holdings’ second-largest shareholder, Datuk Sheah Kok Fah statement on June 9 seeking an independent review of the transactions at its upcoming annual general meeting on June 25. Sheah had said that PDM is effectively controlled by PRG’s largest shareholder, Datuk Ng Yan Cheng.
The Edge Weekly’s June 8-14, edition report highlighted corporate governance concerns surrounding the deal.
PDM owes PRG’s construction unit, PCI, RM37.17 million for work completed on the Picasso Residence project in Kuala Lumpur. Under the proposed settlement, PDM would transfer 12 residential units worth RM13.37 million to partially repay the debt, while the remaining amount would be negotiated separately.
PRG later terminated the agreement on May 19, citing the RPT issue and PDM’s failure to disclose a court judgment affecting its obligations.
In a statement on Thursday responding to media reports, PRG's board said its members, including Ng’s son-in-law managing director Andrew Chan Lim-Fai, were unaware of ownership developments involving PDM when the debt settlement was proposed.
However, when materials were informally relayed by a shareholder to several non-executive directors, as well as internal and external auditors, it had conducted multiple special board meetings, carried out its own verification process, and obtained independent legal advice to assess the issues raised and determine the appropriate action.
PRG added that upon identifying the RPT, Chan abstained from all deliberations and voting on matters relating to the deal, and only participated to provide factual information to the board.
The company said these factors ultimately led to the decision to terminate the settlement agreement and make the necessary disclosures to Bursa Malaysia on May 19.
PRG also noted it had issued a statutory demand to PDM on June 8, requiring settlement of RM64.24 million in outstanding payments owed to PCI within 21 days. A breakdown of the outstanding payments were not provided.
The company said it is engaging with Bursa Malaysia to ensure compliance with listing requirements, while focusing on recovering the sums owed and protecting shareholders’ interests ahead of its AGM.
PRG shares rose half a sen or 5.6% to settle at 9.5 sen on Thursday, giving it a market capitalisation of RM46.6 million.