VCPlus&rsquo controlling shareholder Lim Beng Chew has sold 1.033 billion shares representing 20.657% of his stake in the company to Tang Zhengming, an executive director of the company.

 

Tang was appointed to her role on March 1. On VCPlus&rsquo website, Tang is a businesswoman with &ldquo extensive experience in business and operations&rdquo . She previously held a senior executive position in Shanghai-listed Jiahe Food Industry.

 

Lim netted $1.47 million from the sale, or 0.142 cents per share. Following the conclusion of the sale on June 27, Lim&rsquo s stake in the company was lowered to 4.029% from 24.686% previously. Tang&rsquo s stake was raised to 24.657% from 4% previously, making her the controlling shareholder of the company.

 

According to a release dated June 28, Lim sold part of his stake &ldquo for personal reasons&rdquo . The share sale was carried out via an off-market transaction.

 

It adds that since her appointment, Tang has led the streamlining of the main existing business operations in APEC Solutions, the group&rsquo s digital marketing business unit. She will look to introduce more products and services to APEC&rsquo s existing and new corporate clients.

 

The company says it also remains &ldquo positive&rdquo on the outlook of its fintech business unit, Custody Plus with the increased regulatory requirements for token issuers and hedge funds to store their digital assets with independent custody solution providers set to benefit the unit.

 

 

VCPlus will be raising just gross proceeds of $600,000 from a placement instead of $6.66 million after two of the three investors pull out.

 

According to VCPlus, Hyper SN and QNX Partners have not remitted their respective portion of funds by the long stop date of Jan 30.

 

They were supposed to invest $2.61 million and $2.34 million respectively, and end up as shareholders holding 12.41% and 11.12% respectively in VCPlus, reads the company&rsquo s Dec 6 announcement.

 

A third investor, one Tang Zhengming, is going ahead with her investment by subscribing for 200 million new shares at 0.3 cents each.

 

However, instead of investing $1.71 million for a 8.13% stake as originally intended, Tang will now invest just $600,000 for a stake of 4.17%.

 

Nonetheless, she might further increase her investment by up to $1.11 million down the road, as VCPlus has given her a call option to subscribe for another 370 million new shares at 0.3 cents each.

 

If Tang fully exercises her option, she will end up with 7.71% of the company.

 

According to VCPlus, Tang, a Singaporean, &ldquo is an accomplished businesswoman&rdquo in the F& B industry.

 

She holds a stake of 1.32% in an entity called Veivo Web Technology, with one Gao Hong owning the remaining 98.68% via an entity called Delta Investment Holding Group.

 

Last October, VCPlus announced a &ldquo strategic collaboration framework&rdquo with Delta to explore the incorporation of a joint venture company as the exclusive distributor of the services of Veivo Web in Asia Pacific region outside China.

 

According to VCPlus, the funds from Tang will be used for working capital. 

 

It will also tap on her &ldquo expertise and business network&rdquo to &ldquo explore commercial opportunities to support and strengthen&rdquo its future businesses.

 

OVER the past week, it came to light that the Commercial Affairs Department (CAD) and the Monetary Authority of Singapore (MAS) have asked Sevens Atelier and VCPlus to assist in an investigation.

 

But the two companies have taken different approaches in informing the market.

 

On Sep 20, Sevens Atelier said in a four-paragraph announcement that it had been asked to hand over emails and corresponding attachments in the corporate email accounts belonging to former chairman and chief executive Richard Koh Chye Heng, executive director Lim Xiu Fang Vanessa, and a member of its management team named Tang Yao Zhi.

 

Sevens Atelier said that CAD and MAS wanted emails and documents related to announcements it had made on Jun 22, 2021, Sep 8, 2021, and Apr 28, 2022. These announcements related to its new controlling shareholder, the appointment of an executive director, and its change of business and name.

 

Sevens Atelier was previously known as Pan Asian Holdings, and it used to supply pipes and equipment for water infrastructure projects. It changed its name last year, and now describes itself as a provider of consultancy services for the &ldquo design and build&rdquo of premium landed properties in Singapore and Australia.

 

On Sep 22, Sevens Atelier revealed more information in response to a series of questions from the Singapore Exchange (SGX). Importantly, the company said that none of the individuals have surrendered their passports, been arrested or charged with any wrongdoing.

 

All three had either been interviewed by the authorities, or were about to be interviewed.

 

Sevens Atelier further stated that its nominating committee had decided not to implement any measures to safeguard against risks of retaining Lim and Tang in their current roles.

 

The company also said it had no information pertaining to the nature of the investigation other than what it had already disclosed.

 

Taking a harder line

On Sep 23, VCPlus announced that CAD and MAS had asked it to hand over all emails in the corporate email accounts belonging to Lim Beng Chew, an executive director of the company, and Cedric Yap Kun Hao, who is the head of a wholly-owned subsidiary called Apec Solutions.

 

VCPlus said that the authorities had also asked for certain meeting minutes, and information on any business dealings with Sevens Atelier in 2021 and 2022.

 

Interestingly, VCPlus added that it had received the order to provide the information on Sep 20 &ndash the same day Sevens Atelier received its order. Like Sevens Atelier, the company asked for a trading halt that day.

 

While it took VCPlus longer than Sevens Atelier to inform the market that it is assisting CAD and MAS with their investigation, the company had much more to say when it did &ndash without any pressure from SGX.

 

VCPlus said that both Lim and Yap had been interviewed by CAD, and handed over their travel documents. Neither of them had been charged with any wrongdoing.

 

The company went on to say that Lim would take a leave of absence for an initial period of three months. His leave of absence may be extended, depending on the outcome of the investigation.

 

Yap will continue in his role for the next three months to ensure immediate continuity of services to customers of Apec Solutions. The company will, however, restrict his involvement in banking and finance matters, and remove him as a bank signatory.

 

VCPlus further stated that the head of business development at Apec Solutions will be appointed its interim head. If no extension of Yap&rsquo s involvement is required at Apec Solutions after three months, he will take a leave of absence pending the outcome of the investigation.

 

The company also noted that it did not have any business dealings with Sevens Atelier in 2021, and that its business dealings with the company in 2022 related to website development and were immaterial.

 

VCPlus was originally known as Anchor Resources, and ran a mining business in Malaysia. Over the course of 2021 and 2022, it morphed into a fintech company.

 

Take action &ndash it&rsquo s not &ldquo prejudging&rdquo

The manner in which companies ought to respond to investigations by CAD and MAS depends on the specific nature of those investigations, as well as exactly which corporate officials are being investigated. Clearly, boards will have to think long and hard about removing individuals who are crucial to the functioning of the company&rsquo s business.

 

Back in 2021, SGX offered a framework of questions in its Regulator&rsquo s Column that boards could ask under various scenarios.

 

For instance, if a company&rsquo s entire board is under investigation, some consideration should be given to bringing in one or two more independent directors (IDs) &ndash perhaps with the help of an external party such as the Singapore Institute of Directors or the Securities Investors Association (Singapore).

 

To further shore up confidence, one of the incoming IDs could be designated Lead ID. The incoming IDs could perhaps also form a special committee to manage the investigative process.

 

If a director is accused of wrongdoing involving the company, the board should consider whether restrictions on the director&rsquo s powers are necessary, and whether changes in reporting lines are appropriate.

 

It might also be useful for the board to review the company&rsquo s internal controls and implement tighter approval processes.

 

When a director is accused of wrongdoing that does not involve the company, the board could consider whether the director will be able to focus on his duties while the investigation is ongoing.

 

Whatever the case, SGX made it clear boards should not fear that taking action amounts to prejudging the guilt or innocence of a director accused of wrongdoing. Nor should the board feel it ought to stand by a fellow director in a time of crisis.

 

Instead, the most important question to ask is whether it is in the best interest of a company that a director &ndash and by extension a senior executive &ndash accused of wrongdoing remains in place while the investigation is underway.

 

It will be interesting to watch if the boards of Sevens Atelier and VCPlus shift their positions in the weeks ahead as more information emerges.