DNeX, CGP reach out-of-court settlement over SilTerra dispute

KUALA LUMPUR (Feb 22): A lawsuit against two subsidiaries of Dagang NeXchange Bhd (DNeX) in relation to a shareholders agreement signed in July 2021 was struck out on Wednesday (Feb 22) after the parties reached an out-of-court settlement.

The High Court also struck out an application for injunction against DNeX Semiconductor Sdn Bhd (DSSB) and SilTerra Malaysia Sdn Bhd, said DNeX in a bourse filing.

The civil suit and injunction application had been filed by Tethystronics Technologies Company Ltd (TTCL), a special-purpose vehicle ultimately owned by Beijing Integrated Circuit Advanced Manufacturing and High-End Equipment Equity Investment Fund Center (CGP Fund), which also holds a 40% equity interest in SilTerra. DNeX owns the remaining 60% of SilTerra, via DSSB.

The suit revolves around DNeX exercising its rights as a majority shareholder of SilTerra to appoint directors to SilTerra’s board via members' written resolutions (MWR), a move which was contested by TTCL.

TTCL wanted SilTerra and DSSB to be restrained from acting upon the MWR and directors’ written resolution purportedly passed on Nov 21, 2022.

It also sought to restrain SilTerra and DSSB from taking any steps towards effecting any further change in the composition of SilTerra’s board.

Another relief sought by TTCL was for SilTerra and DSSB to restore the composition of SilTerra’s board of directors to the composition prior to the appointment resolutions.

Under a consent order recorded in the High Court on Wednesday, the board composition of SilTerra will remain as at the composition prior to the MWR.

In addition, the board of SilTerra will not deliberate on matters in respect of the civil suit and the impending arbitrations, and the board of SilTerra is entitled to convene subsequent meetings in respect of other matters related to SilTerra.

“The consent order shall be effective and enforceable until any final award obtained by TTCL in the arbitration is fully satisfied, or the date of the final award of the arbitration if all TTCL’s claims are unsuccessful,” it added.

DNeX's shares experienced a massive selldown following the dispute with the Chinese partner over SilTerra in November 2022. The counter has regained some of its lost ground since it sank to a low of 50.5 sen on Nov 17, to close unchanged at 62 sen on Wednesday.

At 62 sen, DNeX's market capitalisation stands at RM1.96 billion.