LIEW HOI FOO’S position as managing director of Lysaght Galvanized Steel Bhd hangs in the balance until shareholders decide on his re-election at the company’s upcoming 36th annual general meeting (AGM).

The 60-year-old, who retires pursuant to Article 81 of the company’s Articles of Association, is seeking re-election at the AGM, which will be held at the Sime Darby Convention Centre in Kuala Lumpur on June 22.

A low-profile traffic pole maker, Lysaght (fundamental: 1.95; valuation: 2.40) made the headlines last year as members of the founding family, who are also the major shareholders, fought for control of the company.

Liew and his sister-in-law, Annie Chew Meu Jong, crossed swords after the passing of Lysaght’s founder Chew Kar Heing at the age of 81 in February last year.

Meu Jong, 59, is the eldest daughter of Kar Heing and an Australian citizen. She sits on Lysaght’s board as non-executive director. Liew is married to Kar Heing’s second daughter Mary Chew Mee Lee.

Meu Jong is the oldest of four siblings, followed by Mee Lee, who is a substantial shareholder of Lysaght, then Hew Chek, who is busy with his own businesses, and Mooi Sing, who is a medical secretary.

The family feud supposedly began with Meu Jong’s objection to Lysaght’s proposal in May last year for a share split, bonus issue and free warrants, which resulted in the plan being aborted last October.

Mooted by Liew, the proposed corporate exercises were aimed at rectifying Lysaght’s public shareholding spread — which as at May 15 stood at 23.89%.

The Chew and Liew families have, over the years, collectively owned more than 70% of Lysaght. Lysaght (M) Sdn Bhd (LMSB) is the controlling shareholder with a 55.14% stake while Liew’s Ingli Sdn Bhd holds 15.46%. This shareholding structure clearly shows that whoever controls LMSB will eventually control Lysaght.

According to information from the Companies Commission of Malaysia (CCM), LMSB is 40%-owned by Chew Bros (M) Sdn Bhd, the private investment vehicle of the Chew family. But it is worth noting that Liew also has 17.1% equity interest in LMSB, held through WTWT Sdn Bhd.

It is noteworthy that Singapore-listed United Engineers Ltd (UEL) owns an 11.63% stake in LMSB, which has been put up for sale since 2013. Hence, UEL is seen as the kingmaker in the family dispute.

According to sources, Meu Jong’s Chew Bros came close to beating Liew’s WTWT in acquiring UEL’s 11.63% stake in LMSB this year. However, CCM records show that UEL’s stake has yet to be transferred to any party.

As the Lysaght AGM draws near, there is speculation that Liew may be ousted by Meu Jong, who is director-cum-manager at LMSB and managing director at Chew Bros.

To recap, Kar Heing had passed the baton to Liew after the latter was appointed to Lysaght’s board in February 2003. Liew, who had 27 years of experience — having worked with three different organisations as accountant,  executive director and dealer’s representative — before joining Lysaght, was promoted to managing director a year later.

Under him, Lysaght has become a cash-rich company with zero gearing. As at March 31, the company had a cash pile of RM39.5 million with retained profits of RM62.6 million. It generated revenue of RM65.2 million in the financial year ended Dec 31, 2014 (FY2014), and a net profit of RM11.2 million.

In the first quarter ended March 31, 2015 (1QFY2015), the group’s net profit stood at RM6.76 million, up 121% from a year ago, thanks to a gain from the sale of a piece of leasehold land in Bandar Sunway. At RM17.03 million, revenue was 13% higher year on year.

The question is, can the company maintain its performance if Liew leaves? Will Meu Jong bring in new blood or will she lead the group herself?

Over the years, the Chew family has been running its businesses through Bursa Malaysia-listed Lysaght as well as Lysaght Corrugated Pipe Sdn Bhd (LCP), which is wholly owned by LMSB. LCP manufactures corrugated steel pipes and highway guardrails and has Meu Jong as its director-cum-manager.

Lysaght may have 1,788 public shareholders but it appears that Liew’s fate rests with Meu Jong, who has a greater say in LMSB.

Back in October last year, after the launch of her father’s autobiography, Meu Jong told The Edge that she had no intention of expelling Liew from Lysaght despite some “family disagreements” with him.

“No, no, no, I have no such plan. I want to work with him [Liew].There is no point in taking everything. You have got to recognise that these are good people and you’ve got to work with them. That’s what makes you a boss. If you take control of everything, with one person, how much can you do? You can’t,” she said.

Today, some eight months later, has Meu Jong made her peace with Liew? The outcome of Lysaght’s AGM may offer a clue.

This article first appeared in The Edge Malaysia Weekly, on June 8 -14, 2015.

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