South Malaysia Industries declines to provide depositors' record to Prolexus

KUALA LUMPUR (May 3): South Malaysia Industries Bhd (SMI) said that it will not provide a record of depositors (ROD) to two subsidiaries of Prolexus Bhd, to protect the interests of the company and its shareholders, according to its filing on Wednesday (May 3).

On April 18, two Prolexus subsidiaries — Honsin Apparel Sdn Bhd and HiQ Media (Malaysia) Sdn Bhd, which collectively own a 10.01% stake in SMI — filed a suit to compel SMI to provide them with its ROD in their attempt to call for an extraordinary general meeting (EGM) to remove the current directors of SMI, and said the units had abused the court process.

The suit was struck out with RM20,000 costs to SMI and RM4,000 costs to Tricor Investor & Issuing House Services Sdn Bhd, SMI's share registrar.

"In light of the complaint lodged and under the Rule 15, the company will not provide Honsin and HIQ Media with a copy of the ROD pursuant to Section 34 of Securities Industries [Central Depositories] Act 1991 (SICDA 1991), until a mandatory general offer is received from Honsin and HIQ Media and all the other persons acting in concert with Honsin and HIQ Media,” it said.

According to SMI, both Honsin and HIQ Media issued a notice of intention on Feb 17 to SMI, but SMI was inclined to provide the ROD, following its position at that material time (as of Feb 27), it said.

“However, Honsin and HIQ Media had commenced an action in abuse of the court’s process in an attempt to circumvent the requirements of SICDA 1991. The decision of the High Court dated April 17 clearly spelt out the abuse of the court’s process by Honsin and HIQ Media,” it said.

On March 23, SMI had also lodged a complaint earlier this month with the Securities Commission Malaysia (SC), alleging that over 20 parties — comprising companies and individuals acting in concert — had accumulated more than 33% equity stake in the company without making a mandatory general offer.

SMI alleged that the group was acting in concert with Honsin and HIQ and included YB Ventures Bhd, another listed company, an executive director and a substantial shareholder of both Prolexus and YB Ventures, alongside “some close relatives”.

On April 10, the SC confirmed that it was looking into SMI's complaint. Prolexus, meanwhile, has denied its acquisition of shares in SMI had breached any regulations and said it would not succumb to demands to make a mandatory general offer for SMI.

SMI's share price closed half sen or 6% lower at 79 sen on Wednesday (May 3), valuing the company at RM164.61 million. Meanwhile, Prolexus closed one sen or 2% lower at 47 sen, valuing the group at RM128.71 million.