"...........Shareholder oppression occurs when the majority shareholders in a corporate take action that unfairly prejudices the minority. It most commonly occurs in close corporations, because the lack of a public market for shares leaves minority shareholders particularly vulnerable, since minority shareholders cannot escape mistreatment by selling their stock and exiting the corporation.The majority shareholders may harm the economic interests of the minority by refusing to declare dividend or attempting a squeezeout........"

Before I would elaborate at length how the 47.49% minority shareholders in Heveawood Industries Sdn Bhd, as the single largest shareholder of Heveaboard Berhad, are being oppressed by the Yoong family (who owned a combined 52.51% stakes), let us start by examining the corporate structure of Heveaboard Berhad itself.

The current Board of Directors of Heveaboard Berhad consists of :

1. Yoong Hau Chun, Group Managing Director
2. Yoong Li Yen, Executive Director
3. Yoong Tein Seng @ Tenson Yoong, Alternate Director to Yoong Hau Chun
4. Bailey Policarpio, Non-Independent Non-Executive Director
5. Tan Sri Dato' Chan Choong Tack, Independent Non-Executive Chairman
6. Lim Kah Poon, Independent Non-Executive Director
7. Dato' Loo Swee Chew, Non-Independent Non-Executive Director

                       Yoong Hau Chun, Group Managing Director

It is worthy to note that Yoong Hau Chun, Yoong Li Yen, Yoong Tein Seng @ Tenson Yoong and Bailey Policarpio are family related. Yoong Tein Seng @ Tenson Yoong fathered Yoong Hau Chun and Yoong Li Yen, while Bailey Policarpio is the husband to Yoong Li Yen.

Yoong Tein Seng @ Tenson Yoong, Alternate Director to Yoong Hau Chun

                     Yoong Li Yen, Executive Director

At a glance, Heveaboard Berhad is already on a wrong footing structurally (or intentionally engineered so?), in that essentially and operationally there are only 2 persons managing and controlling the whole company, namely Yoong Hau Chun and Yoong Li Yen. They are the only two board members with the executive powers in Heveaboard Berhad (as highlighted in blue above).

I would give a thumbs-up to the masterly insertion of Yoong Tein Seng @ Tenson Yoong, as the Alternate Director to Yoong Hau Chun in the Board. Why so?

Well, some of you may know that Tenson Yoong, as he is more commonly known in Seremban, together with Dato' Loo Swee Chew and Dato' Seri Yong Tu Sang (the Managing Director of BTM Resources Berhad) are the founders of Heveaboard Berhad. After the horrendous near-bankrupt debacle of Heveaboard Berhad in the year 2008/9, Tenson Yoong was struck with a stroke and became wheel-chaired untill today. As he is physically constrained to carry on the active role as the Group MD, his reign on Heveaboard Berhad was passed to his only son Yoong Hau Chun on 6/6/2012 whilst being reclassified as an Alternate Director to him.

The appointment of Tenson Yoong as an Alternate Director is a maestro move by the Yoongs. By virtue of the definition of an alternate director, Tenson Yoong is akin to 'invinsible' effectively. An Alternate Director only acts on the instructions of his appointor, Yoong Hau Chun in this case. He is usually not as “au fait” or up-to-date with the current affairs of the company as his appointor and only sits in when his appointor is absent. And there is no place in law or locus for the alternate director if his appointor is present in a meeting.

The position of Yoong Hau Chun as the Group MD is without doubt the single most influential post in Heveaboard Berhad. I cannot recall seeing in another publicly listed company wherein the MD has an alternate director seated at a corner. How could the company allows an alternate person to votes or binds the company in any decision making who is not being au fait to the company's daily affairs in the absence of the most influential person in the company?

I could only conclude that this is both a tactical and a defensive move by the Yoongs. Defensive in the event should anything untoward happens to Tenson Yoong's only son Yoong Hau Chun. Tactical in the event Tenson Yoong's founding partners of Heveaboard Berhad in the guise of Heveawood Industries Sdn. Bhd. revolt for control.

Don't forget the second-in-command and the only other director with an executive power in the name of Yoong Li Yen will be there to ensure the succession or fortification on the above scenarios should it ever happened.

Well planned move indeed, Yoongs. But all these come at the expense of all other shareholders of Heveaboard Berhad, you and me included. As explained above, the alternate director or Tenson Yoong is actually a lame or a sitting duck, and can only act if his appointor fails or unable to perform the fiduciary duties attached to him as a MD. As a matter of fact, based upon Page 13 of The Annual Report 2014 of Heveaboard Berhad, Yoong Hau Chun attended all 6 of the the latter's board meetings in that year. Simply put, Tenson Yoong as an Alternate Director to Yoong Hau Chun was redundant in his role and capacity in 2014, since Yoong Hau Chun attended all 6 meetings. Such being the case, then why is Tenson Yoong being paid a lofty remuneration of a cool $1.45m to $1.5m in year 2014?

This puts Tenson Yoong to be the highest paid person in Heveaboard Berhad. Isn't it weird to pay Tenson Yoong that kind of money without him having to do a thing in a year?

Dato' Loo Swee Chew, Non-Independent Non-Executive Director

On the other hand, Tenson Yoong's founding partner Dato' Loo Swee Chew who hails from Kuantan, Pahang, was only paid a meager remuneration of under RM 150,000 a year (excluding directors' fee), hardly 10% of Tenson Yoong's RM 1.45m to RM 1.5m fee. In addition to his role as an Non-Independent Non-Executive Director for Heveaboard Berhad, Dato' Loo Swee Chew also served as a member of Heveaboard Berhad's Tender Board Committee and often has to travel from Kuantan to Gemas or KL for these meetings at the age of 68 years old.

Yet there is a vast difference of remuneration between the two. And it is not right at all. Granted, Tenson Yoong may be one of the founders and the ex-MD, but that alone does not accord him the whims and fancies of milking Heveaboard Berhad for his personal advantage. The Board should have provided a more moderate or reasonable fee for him, even if his experience and guidance is sought by the Board or management. But certainly not at RM 1.45m to RM 1.5m a year to him as an alternate director. No way.

What was particularly unhappy and fuming among the founding partners of Heveaboard Berhad was that none of the other partners' children were offered nor allowed to work in Heveaboard Berhad or in any of its subsidiaries, except Tenson Yoong's very own children ie Yoong Hau Chun, Yoong Li Yen and his husband Bailey Policarpio as the directors and Yoong Li Mian in the IT Department.

To say the very least, all of these founding partners' children are equally qualified to be in the board of directors of Heveaboard Berhad and or its subsidiaries for a start. For example, Dato' Loo Swee Chew's only son Anson Loo has vast experiences in timber related trade and manufacturing. Emmy Yong, Ellen Yong and Yong Hing Siong, the children of the other founding partner Dato' Seri Yong Tu Sang, are already on the board of directors of BTM Resources Berhad for many years now.

As communicated privately by some of these disgruntled minority shareholders of Heveaboard Berhad and Heveawood Industries Sdn. Bhd., Heveaboard started off as a sendirian berhad among like-minded good friends Tenson Yoong, Dato' Loo and Dato' Seri Yong with the aim to ultimately let their respective second generation takes over the business when all of them become old age.

But the calculated moves in the last few years by the Yoongs on Heveaboard Berhad truly befit the term "sendirian berhad", as the Yoongs treated Heveaboard Berhad (and Heveawood Industries) like their very own sendirian punya berhad company.                                   

Tan Sri Dato' Chan Choong Tack, Independent Non-Executive Chairman

   Lim Kah Poon, Independent Non-Executive Director

Although in form Heveaboard Berhad current board line-up seems to have satisfied the listing requirements of having at least one third of its board members to be designated as independent and non-executive directors, but in substance it is entirely a different thing altogether.

Tan Sri Dato' Chan Choong Tack and Lim Kah Poon are the only two independent and non-executive directors of Heveaboard Berhad. An independent director, by definition, is someone who does not have a family, material or pecuniary relationship with the company or related persons who so appointed him. In essence, one of his key fiduciary duties as an independent director demands him to look at any company matter or any board decision as if he is a total outsider, but with the best interest of the shareholders and corporate governance at heart.

In short, his role is more like a gate-keeper in ensuring that all decisions are made and conformed to the best practice of the company as a whole.

Therefore, an Independent Director has no business soliciting, negotiating or even promoting Heveaboard Berhad with suppliers, creditors or research analysts for whatever the reason. Doing these acts as an Independent Director will render his independence for the very reason he was appointed in jeopardy and impartiality compromised.

As I have said in my earlier article entitled HEVEA : Please Tell Us How Many Was It, I have seen with my own eyes the meeting between Marcus Chan of CIMB Securities Research, Lim Kah Poon the Independent Non-Executive Director of Heveaboard Berhad and Yoong Hau Chun, shortly before Marcus Chan began actively promoting Heveaboard Berhad via CIMB Securities Research platform to the investment circle, and the impressive stock price runs-up of Heveaboard Berhad after the meeting.

By being involved in a research promotion and stock play meeting as such and in so doing, the independence and impartiality of Lim Kah Poon as a sitting independent director, on behalf of all shareholders of Heveaboard Berhad as well as that of the regulatory authorities' expectation entrusted on him as an independent outsider, has just dissipated in thin air.

Robertl

有料爆料，懲奸治恶！

Dare to Reveal without Fear

January 21, 2016