Protasco rejects resolution to remove MD and will convene EGM to remove Tey

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KUALA LUMPUR (Oct 31): Protasco Bhd's boardroom tussle has stepped up to another notch today. The board of the construction outfit has rejected a resolution to remove its managing director Datuk Seri Chong Ket Pen. Meanwhile, Protasco insists to call for an extraordinary general meeting (EGM) to remove two of its non-executive director, Tey Por Yee and Ooi Kock Aun.

In a statement today, Tey said Protasco' board has decided to convene an EGM to remove him and Ooi from the board. The EGM will be held two days before the shareholder meeting he requested to oust Chong on Nov 28.

According to the statement, Protasco’s board today refused to have Chong to explain on any of the allegations of RM10 million personal financial gain from two contracts in the company’s investments in Indonesia. “The resolution to suspend Chong until disciplinary action can be taken was also not allowed to be tabled,” Tey said.

In the latest development, Tey alleged Protasco’s board is no longer independent as they were not interested to uphold the interest of shareholders. "In fact, they are using Protasco's resources and money for Chong's personal agenda to remove me," he claimed, adding that the board trying to prevent shareholders from knowing the truth.

He lambasted Chong for using the board as his shield by brought-in lawyers to the board meeting, who then objected to the resolution being tabled or put to vote. "The meeting was meant to be an opportunity for the board to ask for an explanation from Chong. Instead the board chose to let Chong keep quiet and protect him,” Tey alleged in the statement.

In the press conference on Tuesday, Tey, who owns 16.68% of Protasco, had alleged Chong to have gained some RM10 million from two Protasco's Indonesia investments.

He said Protasco through its subsidiaries had paid a total of RM16 million to PT Goldchild Integritas for bitumen and coal trading with Indonesia. Of this RM16 million, RM10 million was channelled back to RS Maha Niaga Sdn Bhd, whose shareholders are senior management executives of Protasco.
 
Tey claimed that a paper trail of money provided evidence that the amount paid by Protasco went through layers of companies before a RM10 million cheque was drawn and paid for the benefit of Maha Niaga's account with United Overseas Bank (Malaysia) Bhd.

Tey filed a derivative action against Protasco and its senior management, via his private vehicle Kingdom Seekers Ventures Sdn Bhd, for the return of RM10 million to Protasco and general damages it purportedly suffered.

Although the board decided to investigate on the money trail, Tey has questioned the need of the investigation as he has furnished all evidence to the board.

However, Chong denied all the allegations.

“Clearly, these new proceedings amount to nothing more than an attempt to smear and tarnish my reputation, apart from seeking to divert attention away from the earlier ongoing legal proceedings filed by Protasco Bhd against Tey and others,” Chong said in a joint press statement.

Chong said he had appointed solicitors to “vigorously defend” himself against the civil suit and will lodge a police report in respect of those allegations.

 The shareholder feud started last month when Protasco filed a legal suit against Tey, Ooi and PT Anglo Slavia Utama to claim back US$22.2 million (RM73 million) it had paid in its foiled attempt to buy a 63% stake in oil and gas outfit PT Anglo Slavic Indonesia (PT ASI).

 Protasco claimed in a filing with Bursa Malaysia that naming Tey and Ooi as defendants in the suit was premised on the breach of their fiduciary and statutory duties, including the duty to disclose their interests in the transaction, conspiracy to defraud Protasco and the “making of secret profit”.