Friday 29 Mar 2024
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This article first appeared in The Edge Financial Daily on October 17, 2019

KUALA LUMPUR: Minority shareholders of Ekuiti Nasional Bhd’s (Ekuinas) ex-investee Tranglo Sdn Bhd have filed an oppression suit against its major shareholder, TNG Fintech Group Inc, alleging a series of events that impeded business operations, including TNG Fintech’s rejection of Tranglo’s approved financing plan and unreasonable delays in signing up new bank partners.

TNG Fintech bought a 60% stake in Tranglo from Malaysian government-owned private equity fund management company Ekuinas in October 2018 for RM114.9 million, Tranglo’s minority shareholders said in a statement yesterday.

The suit was initiated by Impiro Asia Ltd and Mohammad Hassan Rasheed Gharaybeh, who collectively hold a 13.6% stake in Tranglo.

According to the statement, defendants in the suit include Alexander Kong King Ong (also known as Alex Kong), Wong Wing Chi (also known as Takis Wong), Tranglo co-founder Sia Hui Yong and Tranglo.

The minorities said Kong and Wong were approved by Bank Negara Malaysia (BNM) to sit on the board of Tranglo as TNG Fintech’s representatives after the acquisition. Kong, they alleged, has a track record of two personal bankruptcies.

“TNG Fintech also attempted to instal Alex Kong’s sister as a required signatory of all bank accounts maintained by Tranglo. In addition, Kong and Wong rejected a dividend payout to shareholders despite the company’s healthy performance. Six repeated requests by minority shareholders for a shareholder agreement to be signed were refused by TNG Fintech represented by Kong and Wong. TNG Fintech is registered in the British Virgin Islands, based in Hong Kong and controlled by Alex Kong.

“Kong’s previous business ventures, Next Millennium Sdn Bhd and Asia TravelMart Sdn Bhd, were wound up by the government of Malaysia and Technology Park Malaysia Sdn Bhd for non-payment of taxes and rental respectively. Kong also had a track record of two personal bankruptcies, one in Malaysia and another in Hong Kong,” the statement read.

It also claimed that when TNG Fintech bought the 60% stake in 2018, it had, via Kong, gave a commitment to BNM that it would acquire the balance 40% of Tranglo by Feb 1 this year.

Impiro director Simon Landsheer, meanwhile, claimed that banks in Malaysia have flagged Kong’s bankruptcies and queried why Tranglo has a director with a bankruptcy history.

And now, the situation at Tranglo has worsened to the extent that the management and staff’s time is tied up responding to requests from Kong under the claim of executing his fiduciary duty at Tranglo.

“Requests such as for information to be supplied and in a specific format in a short turnaround time do not contribute to productive operations and as such, Tranglo might miss its US$3 billion (about RM12.59 billion) processing value target by 2020.

“In addition to impeding business operations, the negotiations to acquire our minority stake were not conducted in good faith. All five proposals received require the minority shareholders to relinquish board representation the moment the share sale agreement is signed.

“The proposed payment structures were dependent on TNG Fintech’s initial public offering in the US, which has not happened as claimed by Alex Kong. Based on Kong’s actions, attempts to remove and treatment of directors representing minority interest and his history, we have no confidence in TNG Fintech’s proposed initial public offering and the true value of the shares to be swapped,” Landsheer said.

The minority shareholders also claimed that while TNG Fintech issued a statement on Sept 11, 2017, on its completion of a US$115 million series A funding, Kong admitted in an email on April 8, 2019 to BNM that this funding never materialised.

“The minority shareholders are seeking for dividends to be paid and Tranglo to be wound up due to the untenable working relationship with TNG Fintech,” the statement read.

At press time, neither BNM, Ekuinas, TNG Fintech nor Kong had issued any statements in response to the minority shareholders’ allegations.

Ekuinas’ website indicates that it acquired its Tranglo stake in March 2015 while the stake divestment happened in October 2018.

“Tranglo provides a platform for mobile telecommunications companies to facilitate cross-border transfers of prepaid credit and money remittances in a fast, easy and secure manner. [It was] incorporated in 2009 with [its] headquarters in Kuala Lumpur and international offices in Indonesia, the Middle East and the UK,” Ekuinas said.

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