This article first appeared in The Edge Financial Daily on February 11, 2020

KUALA LUMPUR: NWP Holdings Bhd group chief executive officer (CEO) has been suspended from his duties with immediate effect for an independent investigation into an alleged potential misconduct or breach of fiduciary duty involving a subsidiary’s past transactions.

However, the  timber products manufacturer did not reveal the name of the CEO. The group previously announced on Jan 21 that its then CEO, 46-year-old Datuk Seri Kee Soon Ling had retired, but no replacement has been announced.

Meanwhile, the timber products manufacturer has established an investigative working group for the necessary investigation into its wholly-owned NWP Builder Sdn Bhd’s transactions, it said in a Bursa Malaysia filing yesterday.

The suspension is effective until further notice, it said. “During the investigation proceeding period, all executive powers accorded to the group chief executive officer are suspended until further notice,” said NWP, adding that further announcements shall be made in the event of material developments on the matter.

The announcement yesterday came after NWP, together with NWP Builder, initiated a legal action last June against their former executive director (ED) Datuk Zhang Li, seeking a declaration that she had breached her duty of loyalty and fidelity to the two entities in several business transactions, and damages from losses it suffered because of that.

Zhang was NWP Builder ED from May 6, 2016 to Feb 22, 2018, and that of NWP from May 6, 2016 to Feb 12, 2018.

In NWP Builder’s case, the alleged breaches concerned two agreements NWP Builder inked with Listari Marina (MM2H) Sdn Bhd in 2016 and 2017, to take over the construction of a nine-storey block comprising 160 units of serviced suites called OneLe Tower in Melaka.

As for NWP, the alleged breaches were linked to a heads of agreement with M2B World (M) Sdn Bhd, which NWP claimed had lapsed because Zhang was negligent or failed to bring about a definitive agreement within the stipulated deadline. NWP also alleged that Zhang had caused the group to pay RM877,000 to herself and other directors as directors’ fees without shareholders’ approval from Aug 1, 2016 to Nov 27, 2017.  NWP shares closed half a sen higher at 16.5 sen yesterday, valuing it at RM71.19 million.