Friday 29 Mar 2024
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This article first appeared in The Edge Financial Daily on June 19, 2017

KUALA LUMPUR: The boardroom tussle at loss-making Stone Master Corp Bhd has led to more finger-pointing and fault-finding.

In a nutshell, the once-cordial ties between major shareholder Datuk Karen Lee Fong Yin and managing director Datuk Koh Mui Tee have soured over a RM18 million loan to Stone Master, which was advanced by Starfield Capital Sdn Bhd in January last year.

Starfield is a private firm 99%-owned by Datin Chan Chui Mei, the former deputy managing director of Stone Master. Chan was sued by the Securities Commission Malaysia (SC) last October for allegedly causing wrongful loss to the company.

To recap, Stone Master had entered into 23 exclusive agency agreements (EAAs) with China-based companies for the rights to market and distribute their building materials in Malaysia and Singapore.

In consideration of the exclusive rights granted to it, Stone Master had paid several local representatives of the 23 Chinese companies a sum of RM11.59 million in the form of a non-refundable initial deposit.

The regulator alleged that of the RM11.59 million — RM11.54 million was subsequently paid by the local representatives into Chan’s personal accounts.

Last week, Fong Yin told The Edge that she believed that Koh and Chan were likely to be in the same camp, as the former had received RM50,000 from the latter out of the initial deposit.

She also said that Koh’s legal firm, Koh & Associates, had invoiced the company RM1.285 million for 23 EAAs and related documents.

“I may be wrong, but looking backwards, I think they (Koh and Chan) have always belonged to the same faction,” Fong Yin said.

She further said that she was not aware of the underlying wrongdoings in the company until after the matter was revealed as a result of the SC’s investigation and action.

“In the beginning, my relationship with Koh and Chan was cordial. The SC raided the office of the company over the loan transactions and the EAAs around October and November last year. It was [from] this incident that I discovered that something was very wrong with the loan agreements and the EAAs,” Fong Yin said.

She subsequently learnt that the SC had sued Chan for alleged violations of the Capital Markets and Services Act. In short, the loan transactions were alleged to be fictitious and fraudulent, causing loss to Stone Master.

“So, in the end, my relationship with Koh and Chan went sour. I had openly voiced my opposition to the continuation and implementation of the business strategy after the SC’s action came to my attention,” Fong Yin said.

When contacted, Koh refuted allegations by Fong Yin, albeit admitting that he did receive RM50,000 from Chan.

“The RM50,000 was just a private banking transaction between myself and Datin Chan, it had nothing to do with Stone Master or [the] Starfield loan. In fact, our internal auditor has cleared up the point,” he told The Edge.

According to Koh, this transaction was for the repayment by Chan to him, as he had advanced on Chan’s behalf a contribution of RM100,000 to Yayasan Masyarakat Lestari Malaysia.

“We donated RM50,000 each to the Yayasan. I advanced for her, so she paid me back. This payment was stated in SC’s statement of claim in September 2016, but the SC never said the RM50,000 was Starfield money,” he explained.

Koh explained further that the Yayasan was not connected to him or Chan in any way.

“I didn’t think the donation was a major issue until (it was brought up by Fong Yin) very recently. I will let the court clear my name. I reserve my right to take action for defamation,” he said.

According to Stone Master’s Annual Report 2016, Starfield, whose executive chairman is Chan, is an international private equity investment company which invested in companies in plantation, education and consumer products.

The low-profile lady’s name had previously surfaced in association with companies such as Richnion Bhd and Richnion Management Sdn Bhd along with her husband, Datuk Dr Clement Tan Wei Loon, who was sued by a disgruntled investor.

Wei Loon was previously involved in the boardroom tussle of asiaEP Resources Bhd (now known as GFM Services Bhd) in 2012.

According to Fong Yin, out of the RM11.54 million that went back to various personal accounts of Chan, the SC also discovered that a total of RM2.05 million was transferred into the account of Clement & Associates Sdn Bhd.

The shareholders and directors of Clement & Associates are Debbie Tan Yen Chu and Beatrice Tan Yen Jun.

Koh, however, stressed that it was misleading to suggest that he was in the same faction with Chan and Wei Loon.

“We (Chan, Wei Loon and me) are just friends, but so were me and Fong Yin, who invited me to join Stone Master in 2015. I wouldn’t say that being friends means we do everything together or we see everything eye to eye. This has to be very clear,” he said.

Koh last month expressly alleged that Fong Yin had misappropriated RM125,345 of her own salary advances from February to August last year.

Fong Yin, who is also the vice president of Stone Master, led a bid to remove Koh and executive director Datuk Lee Hwa Cheng in an extraordinary general meeting (EGM) on May 30.

Fong Yin told the media that 91.48% of the shareholders who attended the meeting voted for the resolutions to remove Koh and Hwa Cheng in the EGM.

Koh, however, claimed that he remains the managing director and that he still possesses executive powers over the operation of Stone Master because the meeting was “invalid”.

Last Wednesday, Fong Yin issued a press statement and claimed that the “EGM is valid”, following a decision by the Kuala Lumpur High Court to set aside the ex-parte injunction order to Stone Master in relation to the company’s EGM.

The High Court has now fixed an inter parte hearing for the injunction on Aug 1.

Commenting on that, Koh pointed out that the draft order from Fong Yin’s lawyer did not state a word about the High Court having ruled on the validity of the EGM, as the court has yet to make the final decision.

“The statement [they issued] was very misleading, making everyone believe that this is the end of it. That’s very unprofessional of them,” he said.

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