KUALA LUMPUR (March 31) : The shareholding dispute between Entomo Malaysia Sdn Bhd — the developer of the MySejahtera app — with P2 Asset Management Sdn Bhd arose due to the latter's failure to obtain the letter of award (LOA) from the government to continue using the app via a service contract or a private-public partnership.
P2, which is buying into MySejahtera’s holding company MySJ Sdn Bhd, has sued Entomo, Revolusi Asia Sdn Bhd, and MySJ for alleged breach of share sale agreement (SSA). Revolusi is currently acting as a nominee for Entomo in holding majority stake in MySJ.
In Entomo and Revolusi's statement of defence dated Jan 14 against P2’s suit, the two companies claimed that P2 represented that it will facilitate in getting the LOA from the government.
Based on a SSA inked between P2 and Revolusi in end-2020, P2 is to pay RM19.2 million to Revolusi for 2.6 million MySJ shares across two tranches. A third tranche of RM76.8 million is to be paid in exchange for another 10 million MySJ shares 90 days after the LoA is secured.
P2 was to facilitate the LOA within 60 days of the SSA, upon which Revolusi will transfer 10% stake in MySJ to P2, the statement of defence said.
“As at May 2021, P2 Asset Management had, despite assurances, failed in obtaining the LOA. Revolusi Asia's intention in selling its shares in MySJ was amongst others, to raise funds for MySJ’s operating expenses,” the statement of defence said.
“Delays in obtaining the LOA and consequently, the completion of the transaction, were matters of concern at the material time. P2 Asset Management had agreed to advance monies to Revolusi Asia on the understanding that those additional amounts would only be accounted as payment towards the third and final tranche upon the LOA being obtained,” it added.
Thereafter, the defendants said an additional sum of RM12.27 million was remitted by P2 Asset Management on “a piece meal basis”, on top of the payment of the first two tranches.
However, by end-June 2021, P2 Asset Management had yet to obtain the LOA. Both P2 and Revolusi agreed to consider the execution of a supplemental agreement to address the receipt of the additional sum of RM12.27 million, namely P2’s obligation to obtain the LOA, the statement said.
However, the intended supplemental agreement was not executed beyond the 30-day period given to P2 under the supplementary agreement, it added.
“Despite Revolusi Asia's insistence on P2 Asset Management complying with its obligations under the SSA, the latter's lawyer contended that its obligation to facilitate in obtaining the LOA is only on a best endeavour basis. Revolusi Asia disputed this contention in a letter dated July 21, 2021,” the defence said.
“It was in this letter that P2 Asset Management first alleged that a portion of the third tranche shall be paid out of the on-sale of some part of the shares. Through that letter, P2 proposed terms of the intended Supplemental Agreement that included its proposal to pay a portion of the third tranche upon the on-sale of shares. The proposed terms were rejected by Revolusi Asia,” the legal document said.
“It contended that P2 Asset Management's intention to on-sale the shares without paying the value of the same is an attempt to dodge the obligation to obtain the LOA, (and) was unacceptable as being unlawful and/or unconscionable,” Entomo and Revolusi said.
The two companies are seeking to dismiss the suit, while MySJ has yet to file its defence.
Who owns the disputing companies?
A check on the Companies’ Commission of Malaysia (SSM) shows that MySJ is 81.43%-owned by Revolusi, followed by EcoWorld Development Group Bhd’s wholly-owned unit Hasrat Budi Sdn Bhd (10.05%), P2 with 7.03%, and Ganesan Shanmugam with 1.49%.
Meanwhile P2’s largest shareholders are brothers Johnathan Jaya Sudhir, 28 and Gregory Jaya Sudhir, 27, with a combined 75.56%, followed by Tan Wei Meng (12.89%), Kuan Arunasalam Poraviappan (9.33%), and three other minority shareholders.
Entomo Malaysia is 100%-owned by Singaporean entity Entomo Pte Ltd.
Revolusi Asia meanwhile lists Entomo Pte Ltd’s CEO Raveenderen Ramamoothie with 76% stake, with another 12% held each by Anuar Rozhan and Naveen Pralhad Deshpande.