MC Payment&rsquo s CEO Anthony Koh has, on the evening of June 14, issued a letter to the shareholders of MC Payment.

Koh&rsquo s letter comes after a statement released by the company&rsquo s major shareholder and executive chairman of Oxley Holdings, Ching Chiat Kwong, on June 10.

 

Referring to Ching&rsquo s requisitions to appoint five directors onto the board and remove all but one of the board&rsquo s current members, Koh says that the board &ldquo deeply regrets&rdquo the current state of affairs.

 

He also noted that it was &ldquo unfortunate&rdquo that the company and its shareholders had to be drawn into the tussle, with extraordinary general meetings (EGM) being called to take place soon after the company&rsquo s recently-held annual general meeting (AGM).

 

&ldquo At the outset, the board wishes to state that its belief is that focus should be placed on developing MC Payment&rsquo s growth strategies and creating shareholder value. The board believes that the MC Payment&rsquo s limited time and resources are best spent on advancing the interests of the shareholders. The spotlight should be on creating growth and economic value for the shareholders,&rdquo stresses Koh.

On this, Koh says that the board wishes for the company to remain &ldquo above the fray&rdquo and to return to business as usual, with a focus on creating &ldquo growth and economic value&rdquo for all shareholders and stakeholders.

 

He adds that the company will continue its commitment to transform MC Payment into a &ldquo full spectrum digital data and digital financial ecosystem company&rdquo from its current business.

 

&ldquo Moving forward, the Board hopes to focus on the development of MC Payment&rsquo s planned growth trajectory and strategies and to help MC Payment capitalise on the full spectrum of digital opportunities, including digital data platforms, cloud services, data analytics, AI-assisted predictive analysis for companies and blockchain technology,&rdquo writes Koh.

 

Further to his letter, Koh drove home the point with an attachment of the current board of directors&rsquo credentials.

On Ching&rsquo s allegations in his previous statement, Koh says the board will address those &ldquo in due course&rdquo .

On June 10, through his lawyer, Ching Chiat Kwong, better known as the major shareholder and executive chairman of Oxley Holdings, released a statement explaining his position on Catalist-listed MC Payment in which he holds a 27% stake. The statement - a copy of which has been sent to SGX RegCo - comes just two days after Ching found out that MC Payment&rsquo s board planned to make a sizeable purchase with new shares. (MC Payment was listed in February this year through an RTO of Artivision.)

 

Clearly, Ching has been unhappy about the way the current board has behaved towards him. In MC Payment&rsquo s AGM on April 28, Ching&rsquo s son Shawn Ching and Henry Ng were not re-elected as directors. On May 4, Ching requisitioned an EGM to nominate himself, Shawn Ching, Ng and two other directors to the board.  

 

&ldquo On May 6, 2021, Mr Albert Cheok also welcomed me to the Board, and stated that from   reading my credentials, I have &ldquo well established business acumen and business experience&rdquo . Yet, in the next breath &ndash in an email that I believe was inadvertently sent to me by mistake &ndash Mr Albert Cheok referred to me as a &ldquo cunning fox&rdquo , intimating that I was acting in a devious or underhanded manner,&rdquo Ching says in his statement.

 

&ldquo This is not the conduct that I expect from the Chairman of a listed company, who is obliged to (i) stimulate and engender a robust yet collegiate environment, set the right ethical and behavioural tone, and provide leadership to the Board and (ii) ensure effective communication with shareholders,&rdquo Ching continues.

 

According to the statement, Ching points out that he has been supportive of MC Payment&rsquo s growth, providing some $600,000 in unsecured loans in 2019 and 2020. As a result, he subscribed to 62.3 million ordinary shares in MC Payment in exchange for the $600,000. In addition, Ching fully   redeemed bonds and associated interest payable by the Company, in return for shares valued at $10 million, on Feb 18 this year.

 

Ching has also undertaken to provide adequate funds to the Company to enable it to continue its operations on a going concern basis and to enable it to pay its liabilities as and when they fall due, at least for another 12 months from April 6, 2021.

 

Yet, Ching found on on June 8, 2021, that MC Payment will be purchasing (or has already purchased) at least a 51% stake in NGSC based on a purchase price of $9.6 million for a 100% share in NGSC. The acquisition would be satisfied by new ordinary shares in the share capital of MC Payment. The transaction has - to date - not been made to shareholders via SGX.

 

NGSC made a net loss of $27.05 million in FY2021. More than that, it&rsquo s on the SGX&rsquo s watch-list and was issued a notice of desliting on Dec 3, 2019. In addition one of NGSC&rsquo s directors, Sri Tjintawati Hartanto, who sits on both the audit and nominating committees, appears to be under or had been under investigation by Ernst & Young following widespread internal control failures and &ldquo significant questionable transactions and cash transactions&rdquo when Hartanto was responsible for the financial functions at NGSC, Ching&rsquo s statement says.

 

Prior to the surfacing of the NGSC purchase, Ching had requisitioned an EGM on May 4, and on May 31, to appoint a new slate of directors. While this was pending, an additional independent director - former Bukit Batok MP David Ong - was appointed at an urgently convened board meeting, where two members of the nominating committee were absent. The only persons present at the board meeting were CEO Anthony Koh (pictured with Ching in happier times), and Chairman Cheok.

 

Subsequent to the May 4 requisition, Koh invited Ching to the board, and two days later, Ching found out that Cheok referred to him as a &ldquo cunning fox&rdquo .

 

The Edge Singapore has reached out to Koh for comment. 

Word on the street is that MC Payment is planning a placement, and some shareholders are not keen on the idea. At its April 28 AGM, two directors were voted out. 

 

The first is Henry Ng, and the second is Shawn Ching, son of the company&rsquo s single largest shareholder Ching Chiat Kwong, who controls 27.06% of the shares.

 

The reaction was swift. Ching, better known as the executive chairman and major shareholder of Oxley Holdings, fired a letter to the company the following day, and another on May 3, where he exercised his right to requisition an EGM.

 

Besides tabling motions to put Shawn and Ng back on the board, Ching wants to be on MC Payment&rsquo s board personally as well. In addition, he wants confirmation from the board that the company would do anything to dilute existing shareholders ahead of the EGM.

 

CEO Anthony Koh holds a direct stake of just 6%. Market observers are hazarding a guess that he had collected sufficient votes to block the re-election at the AGM. Since shareholders have voted in favour of the general mandate, management could issue new shares in a placement at any time.

 

When asked by The Edge Singapore what his plans are, Koh replies: &ldquo To grow the company into a leading digital payments company.&rdquo