KUALA LUMPUR (Oct 20): South Malaysia Industries Bhd (KL:SMI) has succeeded in its bid to remove six directors nominated by a substantial shareholder after the High Court quashed the Securities Commission Malaysia’s (SC) approval of their appointment.
In a bourse filing on Tuesday, SMI said the High Court on Monday also ordered the regulator to pay RM15,000 in costs.
The ruling follows a judicial review application by SMI in September last year to challenge the SC’s approval of the appointments, which included former Perak police chief Datuk Mior Faridalathrash Wahid. The six individuals were nominated by substantial shareholder Target 1 Sdn Bhd before the takeover offer document was issued.
Target 1 and persons acting in concert voted in favour of the proposed appointments at an SMI’s extraordinary general meeting after the SC had granted its consent following an application by TA Securities Holdings Bhd dated Oct 30, 2024.
Target 1 previously said that the EGM held on Jan 9, 2025 approved all six nominees, with proxies representing its 50.05% stake in SMI voting in favour. SMI has disputed the validity of the meeting.
Target 1, which is controlled by businessman Francis Leong Seng Wui, held a 30.67% stake in SMI before entering into a collaboration agreement with Techbase Industries Bhd’s (KL:TECHBASE) subsidiaries Honsin Apparel Sdn Bhd and HiQ Media (Malaysia) Sdn Bhd.
Under the agreement, Honsin and HiQ acquired stakes of 16.86% and 2.52% in SMI, respectively, bringing their combined shareholding with Target 1 to 50.05%.
The shareholding increase triggered a mandatory takeover offer for the remaining 49.95% of SMI at 45 sen per share, valuing the offer at more than RM47 million. Target 1 has said it intends to keep SMI listed.
However, the offeror has yet to distribute the official offer document, amid disputes over SMI’s record of depositors (ROD) and board composition.
Separately, SMI and four of its directors are embroiled in another legal dispute with the SC over sanctions arising from the board’s handling of the delayed takeover offer.
The group and the four directors — Datuk Dr Abdullah Sepien, Datuk Zainuddin Yahya, Latifah Abdul Latif and Datuk Sri Mohd Mokhtar Mohd Shariff — filed an application for leave to commence judicial review, together with a certificate of urgency, on Aug 28.
At Tuesday’s closing bell, SMI’s share price fell 13.64% or three sen to 19 sen, giving it a market capitalisation of RM38.89 million.