A puzzling objection from Lysaght’s controlling shareholder on proposed shares split, bonus issue

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KUALA LUMPUR (Oct 14): Galvanised steel products manufacturer Lysaght Galvanized Steel Bhd has revealed that its controlling shareholder, Lysaght Malaysia Sdn Bhd (LMSB), intends to vote against the company’s proposed share split, bonus issue and issue of free warrants.

In a filing with Bursa Malaysia this evening, Lysaght said its board of directors had on the evening of Oct 13, 2014, received a letter from LMSB, informing Lysaght that a corporate representative of LMSB has been authorised and directed by LMSB “to vote against any resolutions, whether with or without amendments, in relation to the proposals”.

“The board will meet to deliberate on the above and the next course of action to be taken and a further announcement will be made in due course,” said Lysaght, without identifying the said representative from LMSB.

The announcement seemed bewildering as such corporate exercises like share split, bonus issue and issue of free warrants are meant to reward all shareholders.

It is worth noting that LMSB, which is the single-largest shareholder of Lysaght with a 55.14% stake, and Ingli Sdn Bhd (with a 15.46% stake) are both controlled by the same founding family of Lysaght.

Lysaght’s managing director is Liew Hoi Foo, who is the son-in-law of Lysaght’s founder, the late Chew Kar Heing and Lim Lee Kuan; the latter is still a director. Through LMSB and Ingli, the Chew family and Liew collectively owns more than 70% of Lysaght.

Meanwhile, Lysaght also told the stock exchange that it was not able to meet the given timeframe for the submission of the company’s draft circular and documents pertaining to the share split and bonus issue proposals.

Interestingly, Lysaght has also said it has yet to receive the director’s declaration from Chew Meu Jong, a new non-executive director who was appointed on Sept 30 this year. Meu Jong, an Australian, is the sister-in-law of Liew. She is the managing director of Chew Brothers (M) Sdn Bhd that holds a 40% stake in LMSB.

Liew, Lim and Chew are the only three family members in the five-member board of Lysaght. 

Lysaght said an application has been submitted to Bursa on Oct 13 to extend to Oct 31 the submission of the company's draft circular and documents pertaining to the proposals. The application is currently pending Bursa’s approval.