This article first appeared in The Edge Financial Daily on September 3, 2018

KUALA LUMPUR: Versatile Creative Bhd’s largest shareholder has succeeded in getting a new set of directors appointed, but problems at the loss-making plastic packaging manufacturer remain for now.

Versatile Creative has been in the news over alleged financial irregularities. On Aug 21, it announced the dismissal of managing director Datuk Wong Kong Choong and chief financial officer Tan Quok Eow from their employment after they failed to satisfactorily answer claims made against them relating to unauthorised payments to third parties totalling RM2.3 million.

Wong, however, was present at an extraordinary general meeting (EGM) last Thursday, where shareholders voted in favour of the appointments of seven new directors proposed by hypermarket operator NSK Trading Sdn Bhd, which acquired a 22.17 % stake in Versatile Creative between June 28 and July 5.

The other existing board members — including chairman Datuk Lee Kwee Hiang (who is also the acting managing director), non-executive directors Datuk Chew Weng Kit, Datuk Eow Kwan Hoong and Chan Feoi Chun — did not participate in the EGM proceedings.

A day earlier, NSK filed a suit at the High Court, seeking among others, a declaration that the appointments of two directors by the existing board on Aug 21 were invalid.

An affidavit filed in support of the suit claimed that the two directors, Toh Puan Rozana Redzuan and Fathi Ridzuan Ahmad Fauzi, were aligned to the existing board, which was allegedly seeking to retain control of the board despite NSK being the single largest shareholder of Versatile Creative.

At the EGM, the appointments of the seven new directors proposed by NSK were unanimously approved by the shareholders present.

The seven are former deputy agriculture and agro-based industry minister Datuk Seri Mohd Shariff Omar, former commissioner of police Datuk Seri Ayub Yaakob, former attorney-general Tan Sri Abdul Gani Patail, former KPMG advisory partner Datuk Hew Lee Lam Sang, lawyer Nicholas Chang Chen Seng, Khat Chee How and Lim Siew Yeng, who is the daughter of NSK chairman Lim Chou Bu.

NSK has proposed that Mohd Shariff, Ayub, Abdul Gani and Hew take on non-executive roles on the board of Versatile Creative, with Khat and Siew Yeng assuming executive positions.

It is not clear what the existing board’s position is on this, and indeed on the appointments of the seven new directors last Thursday. Versatile Creative’s constitution allows a maximum of 12 board members only.

The problems in Versatile Creative also concern the ownership of shares in the company. Datuk Yap Kit Chuan, representing Swipypay Bhd and Fellazo Corp, has raised a claim of beneficial ownership of a big chunk of Versatile Creative shares, which include NSK’s stake.

NSK filed a suit against Yap, Swipypay, Fellazo and Versatile Creative over the matter on Aug 16.

When met at the EGM, NSK director Kenny Chen said his company decided to take up a substantial stake in Versatile Creative as there were synergies between the businesses of both parties.

NSK operates hypermarkets and wholesale stores in various parts of the Klang Valley, including Kota Damansara, Kuchai Lama, Selayang and Sungai Buloh.

“With Versatile being in the plastics and packaging business and with us being a retailer, it made perfect sense for us to take up a stake, as we could use their products for our business; it is not the case of us buying into the company that is unrelated to our business,” Chen told The Edge Financial Daily.

However, Chen expressed disappointment that the company’s shares had been suspended.

“Any shareholder would not want to invest in a company whose shares are not tradeable. We hope that Versatile would get the suspension lifted soon,” he said.

Trading of the shares was suspended from Aug 8 after the company announced a day earlier that it could not release its annual report and financial statements for the financial year ended March 31, 2018 in time.

This, it said, was because its forensic audit had yet to be finalised, causing a delay to the finalisation of its annual report.

The board of Versatile Creative had appointed Crowe Malaysia to carry out a forensic audit over the alleged financial irregularities.

On Aug 8, Versatile Creative updated Bursa Malaysia that the forensic audit had been completed, and confirmed that there were irregularities involving payments worth RM2.3 million.