KUALA LUMPUR: Tanjung Offshore Bhd lodged a police report yesterday against two of its directors, Tan Sri Tan Kean Soon and Muhammad Sabri Ab Ghani, who were suspended from their executive positions in the company on Jan 28 following the findings of an independent committee.

In a filing with Bursa Malaysia yesterday, Tanjung Offshore also made reference to two articles titled “Tan Kean Soon breaks silence over allegations at Tanjung Offshore” and “Tan Kean Soon declares he is blameless over Tanjung Offshore issue” published on Feb 9 by local media.

“[With] reference to Tan’s allegations in these articles, the company would like to state that Tan was given ample opportunity to present his concerns before the independent committee. However, Tan declined to attend interviews with the independent committee, or to make any statement to the committee despite several reminders to attend the interviews,” said Tanjung Offshore in the Bursa filing.

The company added that Tan had agreed and consented to the formation of the independent committee in a Jan 8, 2015, meeting of the board of directors of Tanjung Offshore.

“The board also agreed to Tan’s request to include his personal legal adviser as an ex officio member of the independent committee ... Tan’s personal legal adviser attended only the initial two meetings out of daily meetings conducted by the independent committee over a two-week period,” said Tanjung Offshore.

In a separate press statement, Tanjung Offshore said its move to lodge the police report  against the two was recommended by the company’s independent committee, which was formed on Jan 8 this year to conduct an internal review following speculative media articles and purported complaints to the authorities against the company.

Tanjung Offshore said the committee had presented its findings and recommendations to the group’s board on Jan 28, which was subsequently accepted by a majority of the board members.

Aside from Muhammad Sabri and Tan, Tanjung Offshore had also suspended Datuk Harzani Azmi as a paid adviser to the company for alleged procedural breaches and lapses in internal controls found by the same committee.

Last week, the company had lodged complaints with the Securities Commission Malaysia and Bursa on possible conflicts of interest and breaches of fiduciary duty related to two transactions, namely a proposed asset injection by Bourbon Offshore Asia Pacific Ltd (mutually terminated in December 2014) and a construction work request (CWR) project from Petroliam Nasional Bhd, which is worth about RM250 million.

The company had alleged that Muhammad Sabri and Tan’s possible conflicts of interest and breaches of fiduciary duty may have resulted in, among others, loss of business opportunity and potential income stream related to the Bourbon deal, and disadvantageous and lopsided terms for the CWR contract under negotiation, which could result in a potential future loss to Tanjung Offshore.

Tanjung Offshore (fundamental: 1.95; valuation: 1.80) closed unchanged yesterday at 53.5 sen with a market capitalisation of RM199.04 million.

This article first appeared in The Edge Financial Daily, on February 12, 2015.