KUALA LUMPUR: The remuneration package paid to Benalec Holdings Bhd’s group managing director Datuk Leaw Seng Hai, which has been labelled “excessive”, has roused the ire of some minority shareholders.

They claimed that Leaw’s remuneration ranges between RM7.5 million and RM8 million in the group’s financial year ended June 30, 2014 (FY14), which is comparable to Benalec’s full-year net profit that year, which was RM7.12 million.

It is also worth noting that the top and bottom lines of Benalec have been declining in the past three financial years. Its net profit in FY14 was RM7.12 million, down 87.5% from FY13’s RM56.75 million, which in turn is down 31.35% from FY12’s RM82.67 million. Revenue for FY14 was RM211.02 million, down 20.62% from FY13’s RM265.84 million, which is in turn down 8.02% from FY12’s RM289.03 million.

“A minority shareholder has questioned the board of directors over the payment package during the AGM (annual general meeting),” a minority shareholder told reporters after the company’s AGM here yesterday.

“He (the minority shareholder) questioned why the company paid such a substantial amount of money to Seng Hai,” said another minority shareholder, adding that the amount paid to Seng Hai was equivalent to the net profit of the company in FY14.

In response, the management said Seng Hai had worked tirelessly for the company, including resolving the company’s boardroom tussle within two years and putting the company back on track.

“Following the boardroom tussle, he (Seng Hai) has to bear all the responsibilities in the company. So the payment is justifiable,” the management told minority shareholders.

In 2013, the group’s audit committee allegedly found two of its directors, Datuk Leaw Tua Choon and Datuk Leaw Ah Chye, guilty of misconduct on the sale of lands to Sunshine 2000 Sdn Bhd and Seaside Synergy Sdn Bhd, including “making secret profit” from the deals.

Tua Choon and Ah Chye, both older brothers of Seng Hai, was then removed from the board on Oct 7 last year, with immediate effect, giving rise to speculations that there was a boardroom tussle going on between Seng Hai and his two brothers.

Following that, Benalec withdrew its legal actions against Tua Choon and Ah Chye and entered into a heads of agreements (HoA) to settle all legal suits, grievances, disputes and claims between the company and its three former directors Tua Choon, Ah Chye, and Tua Choon’s son, Leaw Yongene.

Meanwhile, on prospects, Benalec expects its two land reclamation projects in Tanjung Piai and Pengerang Johor to start contributing to the company’s earnings by 2016, said the group’s chief operating officer Desmond Boey when met.

The two projects are seen as the main driver to turn around the shrinking profit of the company over the past few years, said Boey.

As to the delay of the land reclamation project at 1MY Strategic Oil Terminal Sdn Bhd in Tanjung Piai, Johor, Boey said the project had been put on hold on the client’s request, as the latter needed time to iron out the terms and conditions of the agreement.

“We have submitted the Environmental Impact Assessment (EIA) Report of the project to Johor’s environmental authorities for approval in October this year. The result is expected to be released by the first quarter of next year,” said Boey.

On the Pengerang land reclamation project, he said the environment impact study is still ongoing but they will wrap up the report as soon as possible.

Apart from its projects in Johor, Boey said Benalec has also secured a contract to undertake reclaimation works in Melaka worth RM203.9 million in May, which will contribute positively to the group from FY15 to FY17.

“We are also looking for buyers to purchase our lands in Melaka and Pulau Indah, Klang,” he said.

This article first appeared in The Edge Financial Daily, on December 23, 2014.