Friday 29 Mar 2024
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This article first appeared in The Edge Financial Daily, on May 10, 2016.

 

KUALA LUMPUR: Annie Chew Meu Jong, the eldest daughter of Lysaght Galvanized Steel Bhd’s late founder Chew Kar Heing, has taken control of the traffic pole manufacturer, which may signal the beginning of the end to the family tussle that has been boiling over at the listed company between Meu Jong and her brother-in-law, Liew Hoi Foo, since the passing of Kar Heing in 2014.

In a bourse filing yesterday, Lysaght said Chew Bros (M) Sdn Bhd has surfaced as the new ultimate holding company of Lysaght, which may mean a mandatory general offer (MGO) from Chew Bros is imminent. Meu Jong is the managing director  (MD) of Chew Bros.

Chew Bros has been in control of a 51.63% stake in Lysaght’s immediate holding company, Lysaght (Malaysia) Sdn Bhd (LMSB) — which has a 55.14% stake in Lysaght — since last Friday, according to the filing.

Chew Bros initially held a 40% stake in LMSB. The additional 11.63% stake is believed to have been purchased from the Singapore-listed United Engineers Ltd (UEL). LMSB was originally owned by nine parties, including UEL and the Chew family, which holds a 40% stake through Chew Bros.

The remaining parties are: WTWT Sdn Bhd (17.1%), Tan Sri Abdul Rashid Abdul Manaf (4.67%), and Bumiputera individual and companies (26.6%).

According to paragraph 4.1 of Practice Note 9 of the Malaysian Code on Takeovers and Mergers 2010 under “acquisition of a company through an upstream entity”, a mandatory offer applies to a person who intends to obtain or has obtained control in an up-

stream entity, which holds more than 33% of the voting shares of a downstream company, and the upstream entity has a significant degree of influence in the downstream company.

In this case, LMSB and Lysaght could be deemed the above-mentioned “upstream entity” and “downstream company”, respectively.

Yesterday’s annnouncement came barely two weeks after the company’s MD Liew resigned from his position, after holding the post for 13 years since the retirement of Kar Heing, when the latter passed the baton to him. Liew is the husband of Kar Heing’s second daughter, Chew Mee Lee.

Nevertheless, Liew, who holds a 17.1% indirect stake in LMSB via WTWT, and a direct 15.46% stake in Lysaght through Ingli Sdn Bhd, has consented to be appointed the chief executive officer of the company from April 27 until May 31, to facilitate the smooth handover of duties.

Lysaght’s filing on April 27 indicated Liew’s resignation stemmed from the fact that he could not agree with the board on the identity of Lysaght’s ultimate controlling shareholder. Liew, “claiming personal knowledge, insists that LMSB is no longer the ultimate holding company”, the filing read.

According to the directors’ report in Lysaght’s Annual Report 2015, the directors still regarded LMSB — the immediate holding company — as the “ultimate holding company”, based on publicly available corporate information provided by LMSB.

It was believed that Liew saw Chew Bros as the ultimate holding company of Lysaght, though it was not mentioned in his resignation announcement.

Just a week earlier, Meu Jong notified the company she was no longer a substantial shareholder in Lysaght as she “realised” that her position as MD of Chew Bros does not deem her to hold equity interest in LMSB.

Not much explanation was given, other than the statement that a grant of probate was obtained on July 10 last year and that Kar Heing’s shares went to his estate.

Lysaght has been embroiled in the “family tussle” since 2014 due to the rift between Meu Jong and Liew, which arose after the passing of Kar Heing at the age of 81 in February that year.

Lysaght shares rose 11 sen or 2.96% to end at its one-month high of RM3.83, though it saw a thin trading of some 20,000 shares. The price gives it a market capitalisation of RM159.25 million.

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