9 June 2017, Kulim, Malaysia - Packaging company Ire-Tex Corp Bhd has received a special notice from its largest shareholder Elite Cosmo Group Ltd, who is acting together with another shareholder Tan Yeang Tze to remove four directors from the company.

In a notice filed with Bursa Malaysia today, the Singapore-based shareholder is seeking for Ire-Tex to convene an extraordinary general meeting for the purpose of passing ordinary resolutions to remove Datuk Seri Mohd Shariff Omar, Felix Chin Wui Choong, Ahmad Amrynn Abdul Malek and Mak Lin Kum as directors, with immediate effect.

Elite Cosmo is also seeking to appoint Hamdan Mohd Nor and Raja Hizad Raja Kamarulzaman as directors, with immediate effect.

Conspiracy Discovered - collusion and abiding

To recall, Ire-Tex Corporation Bhd had saw serious damages and loss of assets since the appointment of 2 new directors in September 2016 and November 2016, namely Felix Chin Wui Choong (Chin) and Mak Lin Kum (Mak), both are accountant and practicing lawyer, but not business executives. The duo had since fabricated blames on existing executive directors Kong Hon Kay and Christopher Pucell, in order to hostile take over the control of Ire-Tex. The two business executive and founding member were redesignated and later forced to resign in February 2017.

Mak was also practicing lawyer advising Ire-Tex, and Ire-Tex former directors, as well as other public listed companies formerlly related to the directors.

Shareholders were alarmed when core management were removed all a sudden, and had on 1 March 2017 announced notice to remove Felix Chin Wui Choong, Mak Lin Kum and few others from the board. 3 resigned almost immediately, and Mak had since quickly fill up the vacancy by appointing Shariff Omar (Shariff) and Ahmad Amrynn Abdul Malek (Ahmad) into the board, ahead of EGM. Shariff and Ahmad was also directors for another public listed company Wintoni Group Bhd.

The motive was clear when Chin and Mak had dropped 2 important Ire-Tex law suit against one Teh Eng Huat, amount to RM6.3mil on profit guarantee and RM3mil on potential CBT respectively. Subsequently, new lawsuit and malicious reports were filed. All these were done since shareholder called for an EGM, and Mak and Chin conspiracy was reveiled, they tried to rush through their agenda before EGM.

27 April 2017 EGM had seen total 52% shareholders having 91% voted to remove Chin, Mak and 2 others. 

Mak and Chin had since filed for injunction based on “a wording dispute – something called members in company act”, or a technical excuse, and subsequently the injunction was removed, followed by series of court proceedings which drag the Ire-Tex business to suffer. Market was clueless about such fight, as most board room fight would be between shareholders. Chin and Mak was only recently appointed, and both has no experience in business, nor having any shares in the company. Mak had breached his duty as a lawyer which adviced the company and former directors. Unfortunate the arguement for technical wording without taking shareholders' vote into consideration is a serious flaws in the system, and arguebly law makers may took the easy way out. It’s their right to not put humane and business as their priority. Hence shareholders have to waste time and resources to call for further EGM while the stakeholders suffer.

"The series of legal proceedings, lead by lawyer cum [independent] director Mak Lin Kum had cost Ire-tex financial distress, and their only purpose is by spending Ire-Tex (shareholders) money and time paying lawyers rather than suppliers and business. They literally disobey Ire-Tex owners, which is the shareholders’ right. A clear menace, abuse of power and breach of director duty. Worst of all, costing shareholders and company suffer for these directors’ personal agenda, including buying time prolong their tenure to stay on power to continue with their abuse, is totally unaccepted", commented officer from relevant authority.

Collusion of potential corporate looting

The real motive emerges when Chin and Mak suddenly drop 2 lawsuit on one Teh Eng Huat shortly after shareholders called for EGM. The duo which acted abnormally in breach of their duties and potential incriminating themselves by knowingly cooperated, assisted and conspired with company legal suit defendent.

The first legal suit where Bursa announcement shown that vendor Teh Eng Huat which gave profit guarantee to Ire-Tex was on existing organic business, and has northing to do with “condition that Ire-Tex gave business to Zoomic”, which is in accounting wise, invalid. Shareholders won’t be stupid enough to accept such terms, nor authority blind enough to approve such. The duo Chin and Mak serious breach of director duty which uglily put up such lame excuse linking Teh’s profit guarantee to unrelated machine contract is reckless. Anyone with simple accounting and legal knowledge would find out such serious breach which caused harm to Ire-Tex with a lost of RM6.3mil claims.

The second law suit as per Bursa announcement was potential breach of trust, or CBT, by one Teh Eng Huat. Such ofense was already proven breach of duty by Teh Eng Huat when Ire-Tex auditor found out Teh Eng Huat purposely conceiled information that he told Ire-Tex board to advance money to Zoomic for “project”, but such money was actually paid to supplier which is his own sister. Ire-Tex was shocked and had to announce to Bursa with a “ratification to Recurrent Related Party Transaction – RPT”, and this has sealed the proof of ofense by Teh Eng Huat. In Bursa announcement, Teh Eng Huat and Khoo Hun Sniah signed the payment to Zestek Integration S/B (Zestek), and Zestek is own by Teh Gaik Tiang, Teh Gaik Tiang is Khoo Hun Sniah’s wife and sister of Teh Eng Huat.

On 17 June 2015 Bursa Malaysia announcement, had spell out the clear evidence”Teh Eng Huat and Khoo Hun Sniah are both Directors of ZASB and are also shareholders of ITCB. Teh Eng Huat was also a Director of ITCB until 25 February 2015. Teh Gaik Tiang is an employee of ZASB holding the position Material Manager and she is also a shareholder of ZI who holds 70% direct interest in ZI. Teh Gaik Tiang is a person connected to Teh Eng Huat and Khoo Hun Sniah as she is the sister of Teh Eng Huat and the spouse of Khoo Hun Sniah. Lim Swee Hua, Loke Chong Leng, Ooi Shu Rhui and Tan Chee Keong are all shareholders of ZI who holds 5%, 4%, 4% and 4% direct interest in ZI respectively and they are also employees of ZASB. Lim Swee Hua, Loke Chong Leng, Ooi Shu Rhui and Tan Chee Keong are all deemed to be persons connected to Teh Eng Huat and Khoo Hun Sniah as they are employees of ZASB and are deemed to be persons who are accustomed, whether formal or informal, to act in accordance with the instructions or wishes of Teh Eng Huat and Khoo Hun Sniah. The principal activity of ZI is providing assembly services for the electrical and electronic industries. ”

Such apparent legal suit was droppd by Chin and Mak in-a-rush, when they are to be removed by shareholders. They had uncovered their motive and objective themselves and push for such reckless decision.

More abuses ahead. No AGM, and authorities not giving warning?

Now the 2 directors motive and objective is clear, and the use of 2 more directors namely Shariff and Ahmad was just to stay in numbers to help Teh Eng Huat escape his faith and duty. “Nobody will risk their career, and some extend, their lifes, to help someone they barely knows, as they are not shareholder either. The reward and incentive is obvious, with such clear evidence. Unfortunately, damages were done and they will have to face the consequences”, commented a senior officer from relevant authority.

To make the matter worst, the 2 directors Chin and Mak, together with 2 ally Shariff and Ahmad had not call for AGM either, in hope to “stay in power longer” to abide the crime and cover up of Teh Eng Huat wrong doing. This is another serious breach which the authority could have send warning and ratify such menance. As per when will relevant authority take action is another question.

Market expect more abuses while those in collusion (with Teh, Chin and Mak) still holding Ire-Tex and the shareholders for ransome. As the chairman and politician for "Party Pribumi Bersatu" representing Penang, Shariff involvement in such corporate menance is questionable. Ahmad on the other hand is UMNO activist, according to Bursa announcement. Market is even more puzzled if the 2 knew what they are getting into, and obviously not a good reputation as a politician either, on one hand helping a robber while shouting thief on the other hand. They themselves better look into the mirror closer on their position.

FinLaw News

Refers to: http://www.bursamalaysia.com/market/listed-companies/company-announcements/5456829

OTHERS IRETEX CORPORATION BERHAD ("IRETEX" OR "THE COMPANY") SPECIAL NOTICE ON APPOINTMENT & REMOVAL OF DIRECTORS

IRETEX CORPORATION BERHAD ("IRETEX" OR "THE COMPANY")
SPECIAL NOTICE ON APPOINTMENT & REMOVAL OF DIRECTORS

Please refer attachment below.