Not only does the order come barely a week to the EGM, it could be the first time that the Companies Commission of Malaysia (CCM) is involved in a listed company’s boardroom tussle.
In the injunction, Low is named as a defendant together with his sister Low Lai Yoong, and the family’s vehicle Low Chee & Sons Sdn Bhd, according to an announcement on Bursa Malaysia's website on Thursday March 11.
The ex-parte order forbids the three defendants from casting their votes at the EGM, and/or any other shareholders’ meetings of Ho Hup until the disposal of the suit.
Low, who is the eldest son of Ho Hup’s founder, together with other family members hold a collective 24.6% stake in Ho Hup, making them the second-largest shareholder in the construction outfit.
Although the ex-parte injunction can be contested before the EGM, Low has another hurdle to clear in his effort to regain control of the company from current deputy executive chairman Datuk Vincent Lye.
According to an announcement on Bursa Malaysia on Wednesday, Lye’s faction had filed an injunction to stop the March 17 EGM, with the application to be heard this Monday.
Over the past few months, Low and Lye have been engaged in a public battle for control of the construction company, with the former claiming that he had been ousted.
The upcoming EGM is the second called by Low. The first meeting, which was to be held last month, was cancelled at the eleventh hour after major shareholder Extreme System Sdn Bhd obtained a restraining order. The order was sought on the grounds that the notice period for the resolutions to remove the directors was one day short of mandatory 28-day period.
Extreme System, the vehicle of Lye’s wife, holds a 27.95% stake in Ho Hup.
According to the EGM notice, Low is calling for the removal of seven of Ho Hup’s existing directors — Lye, Lim Ching Choy, Datuk Liew Lee Leong, Lai Moo Chan, Long Md Nor Amran Long Ibrahim, Mohd Shahril Hamzah and Foo Ton Hin — and bring in Datuk Kamaruzzaman Shariff, Hew Thin Chay, Yusob Md Tasir, D Felix Dorairaj, Slamat Hamzah and Chow Seck Kai.
If successful, this will allow Low to push forward his restructuring plan for the company, which would see the issuance of 25.5 million preference shares together with warrants.
Lye’s regularisation plan, in contrast, would see a 60% capital reduction followed by a private placement of 10 million shares and a rights issue of 30 million shares. Low’s main objection to the plan was that it would dilute the stake of its existing shareholders.
This unexpected turn to the saga of Ho Hup may just prove the precursor to a week of legal wrangling by both sides, and casts an even darker shadow of doubt that the EGM will actually come to pass.
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