“The company [VS Industry] takes the view that it has been denied of its statutory rights as a member of NEP to know the financial position, performance and health of NEP and its subsidiaries.”

KUALA LUMPUR (July 26): Electronics manufacturing services provider VS Industry Bhd has filed an oppression law suit against NEP Holdings (M) Bhd and three of its directors, alleging the directors had conducted or exercised their powers as directors of NEP in a manner that was "oppressive" or "unfairly prejudicial" to VS Industry or its interests as a member of NEP.

The directors named are Lim Chang Huat, Lim Chee Kon and Chow Chun Pooi @ Chow Chan Leong,

“In view of the lack of visibility as to the financial position of NEP, the company is seeking an order for NEP to be wound up and two private liquidators — Datuk Ooi Woon Chee and Wong Ching Yong of DC Restructuring Solutions PLT — to be appointed to liquidate NEP and investigate into the affairs of NEP,” VS Industry said in an exchange filing on Wednesday (July 26), adding its originating summons (OS) was filed in the Kuala Lumpur high court on Tuesday (July 25).

In July 2016, VS Industry entered into a subscription agreement with NEP and Chang Huat to subscribe for up to 251,451 or 20% new ordinary shares in NEP, for a total cash consideration of up to RM60 million.

It also entered into a shareholders’ agreement with NEP, Chang Huat and Chee Kon to govern the rights, duties, liabilities and obligations of the shareholders vis-à-vis each other in relation to NEP’s management, operation and subsidiaries.

VS Industry claimed that NEP had not held any board directors’ meetings for more than two years since May 2021, despite numerous requests and attempts. NEP also did not hold its annual general meeting (AGM) for the financial year ended 2021 and 2022 (FY2021-2022).

Moreover, NEP’s audited financial statements for FY2021 and FY2022 were not available and circulated to its shareholders, nor were they tabled at its AGM.

“Accordingly, the company [VS Industry] takes the view that it has been denied of its statutory rights as a member of NEP to know the financial position, performance and health of NEP and its subsidiaries, (to) ask the other directors and the management of NEP to explain the affairs of NEP at the AGM, and to vote on the election or re-election of directors,” it said.

Morevoer, VS Industry said that NEP has not declared any dividend or made any payment to its shareholders for FY2020 even though it made a net profit of RM19.87 million in the financial year, and furthermore, has a dividend policy to pay 50% of its profits.

"The oppression OS is not expected to have any material financial and operational impact to the company. The board, having considered all aspects, is of the opinion that the action taken is in the best interest of the company," said VS Industry, adding the group's carrying amount of investment in NEP stood at RM7 million.

At 4.08pm, VS Industry’s shares were up three sen or 3.49% to 89 sen, giving it a market capitalisation of RM3.46 billion.