KUALA LUMPUR (June 14): Southsea Gold Sdn Bhd has accused Bahvest Resources Bhd’s new management of providing misleading information about the firm at its extraordinary general meeting (EGM) on Tuesday (June 13).

Sabah-based Southsea is 75%-owned by Datuk Lo Fui Ming, who is Bahvest's founder and its former chief executive officer.

The EGM had been called for by a group of Bahvest shareholders to remove Lo, along with his son and former executive director Lo Tek Yong as well as former non-executive chairman Datuk Seri Dr Md Kamal Bilal, after the Malaysian Anti Corruption Commission (MACC) raided Bahvest’s operation centre in Tawau.

However, the trio resigned their posts in Bahvest before the EGM was held.

At the meeting, Bahvest's new management claimed that just before Fui Ming exited the group, the Bahvest founder transferred RM13 million to Southsea as a non-refundable deposit to commence negotiations about compensation for alleged wrongful occupation and trespass on a plot of leased land.

In a statement on Wednesday, Southsea rejected the claim, saying the RM13 million was actually a negotiated compensation, reduced from the RM20.4 million sought in the original letter of demand.

“This RM13 million is termed as a non-refundable deposit for the purpose of continuing negotiations towards reaching a final compensation sum to be paid to Southsea as part of a temporary settlement arrived between Southsea and Bahvest in relation to the wrongful occupation (of the leased land).

"It was to be paid in two tranches in consideration of an extension of time of 90 days granted to Bahvest. RM6 million was paid to Southsea on May 10, 2023 and payment for RM7 million was to be made by May 29, 2023," said Southsea.

In the statement, Southsea said Bahvest’s crusher plant, processing factory, workers accommodation and other structures had been occupying Southsea’s leased land since 2018.

"No compensation was enforced by Southsea on Bahvest due to the goodwill between the companies and in consideration that Bahvest's operations were just starting then.

The demand for compensation was precipitated by the hostile takeover initiated by the current management, which diminished all form of goodwill between Southsea and Bahvest," said Southsea.

“A temporary settlement had been worked out following good faith negotiations between Southsea and Bahvest with full authority from Bahvest’s board of directors at an emergency board meeting held on May 3,” the firm said, adding that the temporary settlement was ratified by the board on May 15.

“Neither Datuk Loh Fui Ming nor Loh Teck Yong participated in any board of directors’ meeting relating to the temporary settlement. The terms of the temporary settlement had been announced to shareholders on Bursa Malaysia,” it added.

Southsea also said Bahvest’s position to not pay the remaining RM7 million to Southsea as per the agreed compensation, would be an act of bad faith and misleading to shareholders.

The firm also denied claims that there is an ongoing court case or material litigation between Southsea and Bahvest.

“Thus, there is nothing to run afoul of the sub-judice rule at the moment. This would seem as an excuse not to answer queries from the media and the shareholders,” it added, referring to Bahvest's new management's statement on the matter during and after the EGM.

Southsea in its statement also claimed that Bahvest had demanded via a draft agreement that Southsea refund Bahvest the RM6 million compensation paid on May 10 as part of the negotiated non-refundable deposit for the wrongful occupation.

Bahvest's shares gained 2.5 sen or 10.42% to 26.5 sen on Wednesday, giving the group a market capitalisation of RM321.70 million.

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