KUALA LUMPUR (Oct 26): Genomics and biopharmaceutical company Malaysian Genomics Resource Centre Bhd (MGRC) said it has on Wednesday received a notice from an independent non-executive director on his intention to apply for leave of court to commence derivative proceedings in the company's name against individual directors and management of the company. The name of the independent non-executive director was not disclosed.

The derivative action against individual directors and management is for alleged breaches of fiduciary duties in relation to the transactions involving MGRC and its subsidiaries with external parties.

Commercial law firm LegalVision defined a derivative action as a claim or proceeding brought by a person on behalf of a company. It aids in circumstances where the company suffers the loss or damage complained of, rather than the person bringing the claim. In bringing that claim, the person would be taking responsibility on behalf of the company for the proceedings.

In a filing with Bursa Malaysia on Thursday, MGRC said the individual directors and management are seeking legal advice on the matter and the status will be updated from time to time.

MGRC's Annual Report 2022 filed with Bursa on Oct 25, 2022 showed that its board of directors previously comprised its non-executive chairman Datuk Seri Dr Chen Chaw Min, independent non-executive directors Ku Chong Hong and Mohd Shakir Shahimi, and executive directors Noor Azri Noor Azerai and Datuk Alvin Joseph Nesakumar.

However, the company has seen a slew of changes in its management and board since then.

These include the appointments of new independent non-executive directors namely Syed Zulkifli Syed Ismail and Aswath Ramakrishnan in May, Chih Yi May in June and Muhammad Badri Hussin and Mohamad Ruzaini Hamzah in October.

Earlier in March this year, Alvin had stepped down as executive director due to personal and medical reasons.

In May, Noor Azri was redesignated to the role of executive chairman. He replaced Chen, who had resigned due to other work commitments and personal interest. In the same month, Ku also resigned from the board, citing other professional commitments.

In September, MGRC chief executive officer (CEO) Sasha Omar Firdaus Aamir Nordin had resigned from his position, citing pursuing his personal interest as the reason. Sasha was appointed to the role in September 2020. Prior to his appointment as CEO, he was the chief operating officer since February 2014.

In July, MGRC also announced the emergence of Datin Seri Jacqueline Ngu Hia Kee, who was Miss Malaysia World 1993/1994, as a new substantial shareholder of the company after acquiring a 5.1% stake in MGRC through 7 million placement shares. In the same month, Rinani Group Bhd became a substantial shareholder after acquiring a 5.85% stake, equivalent to 7.62 million shares, in MGRC and has increased its stake to 11.21% currently.

In the financial year ended June 30, 2023, MGRC slipped into the red, posting a net loss of RM14.25 million compared to a net profit of RM7.21 million in the previous year, mainly due to impairment of receivables and additional business activities which required additional expenditures.

MGRC shares closed down 0.5 sen or 0.99% at 50 sen on Thursday, with 257,000 shares traded. Its market capitalisation stood at RM68.6 million. The stock's share price has declined 35% so far this year.