Wong Kar King, managing director and controlling shareholder of Advanced Holdings BLZ 0.00% , voted against a capital reduction and cash distribution plan, as he was mulling a potential investment.

 

The proposed investment came about after the company' s board put forward the proposal and before the EGM was held on Sept 29.

 

Under the plan, each Advanced Holdings shareholder would receive a cash distribution of 23.2 cents, in a bid by the company to reduce its capital and account for the accumulated losses of more than $15 million as at Dec 31 2022 over the years.

 

Under this plan, Wong would personally receive $9.6 million, based on his stake of more than 41.4 million shares.

 

However, the proposal did not go through, with 81.01% of the shares voting against, outnumbering the 18.99% shares in favour.

 

At the EGM held on Sept 29, Wong apparently left halfway as " he was not feeling well" .

At a subsequent meeting with the rest of the board, Wong said he had " pondered hard" but chose " at the time of voting" at the EGM to vote against.

 

In response to queries put forth by SGX and investors' grouping SIAS, Advanced Holdings says that Wong " was made aware of certain business and / or investment opportunities and had preliminary discussions to explore these opportunities, which would require capital."  

 

" Given the impending EGM date, Wong did not have the latitude to analyse and review such opportunities in full."

 

Therefore, Wong, believing that is in the " best interests" of   Advanced Holdings to retain the capital until these opportunities can be fully reviewed by the board.

 

" Retaining the capital in the company would thus provide more options than proceeding with the cash distribution, which remains an option should there be no conclusive outcome on the other opportunities," the company states.

 

Sias president David Gerald said the failed proposal came as a &ldquo shock&rdquo to shareholders.

SINGAPORE - Investors&rsquo watchdog Securities Investors Association (Singapore), or Sias, on Tuesday raised questions over why engineering firm Advanced Holdings&rsquo capital reduction exercise appears to have failed.

 

In an Aug 23 announcement signed by Advanced Holdings&rsquo managing director (MD) Wong Kar King, the company said it was proposing to undertake a capital reduction exercise to write off accumulated losses of the company amounting to $15.18 million as at Dec 31, 2022. It also proposed to return to shareholders the company&rsquo s surplus capital through a cash distribution of approximately 23.2 Singapore cents for each ordinary share.

 

However, the proposal did not succeed at the extraordinary general meeting (EGM) held on Sept 29 &ndash an outcome that Mr David Gerald, founder, president and chief executive of Sias, said came as a &ldquo shock&rdquo to shareholders.

 

Only 18.99 per cent of the votes were for the proposal.

 

&ldquo What has mystified shareholders is that the number of shares that voted against the proposal was 41,405,109 &ndash almost the exact number held by Dr Wong, which was 41,402,109 as disclosed on page 13 of the Sept 7 letter to shareholders,&rdquo said Mr Gerald.

 

&ldquo In other words, it appears to observers that your managing director initially proposed the capital reduction exercise, then changed his mind and voted against it,&rdquo he added.

 

Mr Gerald said Sias is hoping to clarify the situation on behalf of the company&rsquo s minority shareholders.

 

It is asking who proposed the capital reduction, and whether there was unanimous support within the ranks of the board and senior management, including Dr Wong.

 

It also asked about the nature of the working relationship between Dr Wong and the board, and if the board could provide shareholders an assessment of Dr Wong&rsquo s performance.

 

&ldquo A shareholder who attended the EGM has reported that the MD left in the middle of the meeting, and the chairman told those present that the reason for the MD&rsquo s departure was that &lsquo he was not feeling well&rsquo ,&rdquo Mr Gerald said.

 

Sias is asking if there are plans to conduct a special audit on the events surrounding the EGM and the apparent change of heart by the MD.

 

With the proposal having failed, Sias is also questioning how the company plans to accomplish its objectives.