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KUALA LUMPUR: Shareholders of Malaysian Resources Corp Bhd (MRCB) have approved the RM729 million acquisition of several companies under the Gapurna group but MRCB's search for a new CEO is set to continue.
During MRCB's two-hour EGM, where shareholders raised concerns about its thorny acquisition of a 70% stake in PJ Sentral Development Sdn Bhd, all four resolutions tabled were approved with an overwhelming approval of 99% from shareholders present and voting.
Questioned were raised about the legal implications for MRCB with regards to the acquisition of a 70% interest in PJ Sentral because the Selangor State Development Corp (PKNS) had also put in a legal claim on the stake.
"It's like buying a house that has legal problems. Would you buy?" a shareholder commented.
Some shareholders had also raised questions about PKNS's intention since it had filed a suit and had sought an injunction to stop the deal on the eve of the EGM.
"This deal has been talked about for a long time now," said a shareholder.
In a filing with Bursa Malaysia on Wednesday, MRCB announced PKNS had filed a suit alleging that Nusa Gapurna Development Sdn Bhd (NGD) had breached a shareholder agreement by entering into an agreement to sell a 70% stake to MRCB.
Among others, the Selangor state developer is also seeking an injunction to restrain NGD and MRCB from performing the agreement.
However, because the suit has not been heard yet, the board decided to go ahead with the EGM yesterday.
During the EGM, MRCB shareholders' approved MRCB buying into NGD's 70% stake in PJ Sentral Development Sdn Bhd, as well as the entire equity interest in NGD's wholly-owned subsidiaries – Gapurna Builders Sdn Bhd, Gapurna Land Sdn Bhd and Puncak Wangi Sdn Bhd for a total consideration of RM459 million.
The remaining RM270 million will go into buying Gelanggang Harapan Construction Sdn Bhd and Gapurna Global Solutions Sdn Bhd, which are associated companies under the Gapurna group.
The entire deal has not been completed yet as there are still some conditions to be met.
The settlement of the legal suit is among issues that would have to be cleared before the deal — with regards to MRCB's acquisition of the 70% buy being completed.
Speaking to reporters after the company's AGM and EGM yesterday, MRCB independent director Datuk Abdul Rahman Ahmad said the company was confident that an amicable solution would be reached on the matter.
"We acted in good faith as purchasers, as we talked to the majority owner of PJ Sentral who believed they had the rights to sell the shares of the company," he said.
To a question, MRCB chairman Tan Sri Azlan Zainol described speculation about Gapurna group MD Datuk Mohamed Salim Fateh Din taking over the top position in the company as premature.
"It's a bit too early to talk about it. Wait until all this is settled," he said, referring to the acquisition exercise.
"We are still looking for a replacement, so it's not that easy," said Azlan.
A check on MRCB's website showed a joint media release on Feb 18 between Gapurna and MRCB — stating that Mohamed Salim will officially be appointed as MD upon the completion of the acquisition exercise.
MRCB has been without a CEO since the departure of Datuk Mohamed Razeek Hussain in August 2012.
Mohamed Salim's son, Mohamed Imran Salim, was appointed MRCB group COO earlier this year.
This article first appeared in The Edge Financial Daily, on June 21, 2013.
