Stone Master withdraws lawsuit against new board

This article first appeared in The Edge Financial Daily, on July 18, 2017.
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KUALA LUMPUR: Stone Master Corp Bhd has withdrawn its lawsuit against its new board of directors and shareholders after the Kuala Lumpur High Court set aside an ex parte injunction to the group’s extraordinary general meeting (EGM) last Friday.

In a filing with Bursa Malaysia yesterday, Stone Master said it filed a notice of discontinuance last Thursday for the withdrawal of the legal suit with no order as to costs.

“There is no further action or matter in the suit as the suit has ended,” it said.

“The notice of application (Enclosure 3) for the inter partes hearing which was filed under the suit has been rendered nugatory following the withdrawal. Enclosure 3 which was initially fixed on Aug 1 has been struck out with no order as to costs as pronounced by the High Court on July 14,” the company added.

The EGM had sought to remove former Stone Master managing director Datuk Koh Mui Tee and executive director Datuk Lee Hwa Cheng from the company’s board of directors and the company.

At the same time, it appointed eight new directors, namely Ma Jee Choong, Datuk Abdul Aziz Mohamed, Low Eng Tack, Ng Boon Siong, Tan Wee Hock, Ananda Kumar Ramayah, Foo Chooi Wai and Leong Kam Soon.

Prior to the EGM, Stone Master, under Koh’s management, had filed the suit against the group’s largest shareholders, Datuk Karen Lee Fong Yin and Datuk Eii Ching Siew, and applied for an inter parte injunction to the EGM.

At the time, Stone Master also named the other new directors as defendants, seeking declaration that both Fong Yin and Eii had breached their fiduciary duties as directors of the company.

Stone Master had sought RM1.38 billion in claims against the defendants.

On June 2, the High Court granted Stone Master an interim injunction against the EGM, blocking Fong Yin and Eii from setting up a new board of directors, while Koh and Hwa Cheng remained in office.

However, the High Court set aside the interim injunction on June 14 and ordered that whosoever having possession of any property belonging to the company, including the books and records and the Bursalink password, surrender them to Fong Yin, who is also Stone Master’s vice-president and the company’s single largest shareholder with a 22.29% stake.

The High Court then fixed for inter parte hearing for the injunction on Aug 1.