KUALA LUMPUR (March 14): South Malaysia Industries Bhd (SMI) has filed a judicial review against the Securities Commission Malaysia (SC) to compel the capital markets regulator to come up with a decision on a complaint it made nearly a year ago.
SMI is seeking a mandamus order to compel the SC to conform with the rules of natural justice "in giving due consideration to and conduct of a proper hearing" on the group’s complaint dated March 23 last year.
The complaint was regarding an alleged breach of the Capital Markets and Services Act 2007 by SMI’s substantial shareholders Honsin Apparel Sdn Bhd and HIQ Media Sdn Bhd and other parties acting in concert (PACs) with them.
The leave application has been fixed for hearing on April 29 this year, said SMI in a stock exchange filing on Thursday.
Honsin is wholly owned by Techbase Industries Bhd, formerly known as Prolexus Bhd, which also owns 51.91% in HIQ.
In March 2023, SMI filed a complaint to the SC, alleging that Honsin and the PACs had taken control of over 33% of the company's shareholdings without making a mandatory takeover offer.
Honsin has made several attempts to wrest control of SMI’s board, but to no avail so far.
According to its filing on Thursday, SMI is also seeking an order from the court to compel the SC to make a proper and definitive decision on its complaint, in accordance with proper procedures, and to communicate it to the group, with the basis and reason for its decision set out.
Earlier this week, Honsin, which owns a direct 7.5% stake in SMI, filed a notice to express its intention to appoint Hong Zheng Hong and Tan Eng Gooi as directors in SMI's annual general meeting (AGM) on March 27.
Another shareholder, Chong Fu Shen, also expressed intention to appoint himself, Lum U-Jun, Chong Fu Chih and Loo Choo Hong as directors in the upcoming AGM.
Fu Shen holds 0.7% interest in SMI, which makes him one of the group's largest 30 shareholders.
SMI said its board of directors will convene an emergency board meeting next Monday (March 18) and seek legal advice on the notices from Honsin and Fu Shen.
SMI’s largest shareholder is Asian PAC Holdings Bhd, which owns a direct 2.25% and an indirect 9.3% stakes. Mah Sau Cheong, who is Asian PAC’s single-largest shareholder with a 32% stake, also owns a direct 7.65% interest in SMI.
SMI, which has been loss-making since 2019, is involved in managing carparks, manufacturing assorted wires, and property development, none of which are profitable.
As of its second quarter ended Dec 31, 2023 (2QFY2024), SMI’s deposits, bank and cash balances stood at RM9.76 million, with short-term borrowings of RM8.9 million and long-term borrowings of RM6.48 million.
It is worth noting that the group owns Menara SMI, a 15-storey office tower situated along Lorong P Ramlee here. The group also owns and operates 2,230 car park bays in Kelana Square and 1,227 car park bays in Zenith Corporate park in Kelana Jaya.
According to SMI’s 2QFY2024 balance sheet, it has total assets worth RM154.61 million, 59% or RM90.58 million being investment properties.
SMI shares closed half a sen or 0.8% lower at 63 sen on Thursday, giving it a market capitalisation of RM132.26 million.
Source: TheEdge - 15 Mar 2024
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