This article first appeared in The Edge Financial Daily on May 23, 2017
KUALA LUMPUR: Stone Master Corp Bhd’s extraordinary general meeting (EGM) next Tuesday to remove two directors may expose the company’s corporate governance issues.
The EGM is convened by Stone Master executive director and vice-president Datuk Karen Lee Fong Yin — who would like to remove group managing director Datuk Koh Mui Tee and executive director Datuk Lee Hwa Cheng, with immediate effect. Lee is the single largest shareholder holding a 22.29% stake in Stone Master.
Resolutions would also be tabled at the EGM to appoint eight directors, namely Ma Jee Choong, Datuk Abdul Aziz Mohamed, Low Eng Tack, Datuk Ng Boon Siong, Tan Wee Hock, Ananda Kumar Ramayah, Foo Chooi Wai and Leong Kam Soon.
When contacted, Koh said he intends to “stay on and expose all the wrongdoings” in Stone Master, which seems to be facing some corporate governance issues.
“I don’t have any share (in Stone Master). I am only a professionally appointed administrator. They (Lee and Datuk Yii Ching Siew) are going to [oust me from the board],” Koh told The Edge Financial Daily yesterday.
To recap, Yii and Lee surfaced as substantial shareholders of Stone Master in August 2014. To date, Yii remains the second largest shareholder of the company with a 9.45% stake, but he relinquished his position as executive director and president in March this year.
Koh revealed that Stone Master had early this month received letters from minority shareholders, claiming that they were told by anonymous sources that there have been unlawful activities and wrongdoings in the company.
“(These letters) have compelled the company to make replies, which we did, and also to proceed further with investigation and legal action.” Meanwhile, he said, the minority shareholders wanted the public to be informed of this matter for good reasons.
The loss-making marble and granite manufacturer hogged the limelight for the wrong reasons last October when the Securities Commission Malaysia (SC) filed a suit against its then deputy managing director Datin Chan Chui Mei for allegedly causing wrongful loss to the company.
Chan retired in March this year as she did not seek re-election at the company’s AGM.
It is learnt that Koh and Stone Master chief financial official Yong Tiong Fatt have made police reports about the unlawful activities and wrongdoings in the company.
Last October, the SC filed a suit against Chan, who is the third largest shareholder of Stone Master with a 5.4% stake.
The regulator claimed that Stone Master had entered into several agency agreements with 23 foreign companies for the exclusive rights to market and promote — in Malaysia and Singapore — products belonging to the foreign companies.
“In consideration of the exclusive rights granted to it, Stone Master paid several local representatives of the 23 foreign companies a sum amounting to RM11.59 million in the form of a non-refundable deposit,” the SC said in a statement on Oct 13.
The regulator alleged that of the RM11.59 million — RM11.54 million was subsequently paid by the local representatives into Chan’s personal account — in breach of Sections 179 and 317A(1) of the Capital Markets and Services Act 2007 (CMSA).
The former prohibits a person from using any manipulative device for the subscription, purchase or sale of any securities.