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This article first appeared in The Edge Financial Daily on February 28, 2019

KUALA LUMPUR: Two substantial shareholders collectively holding a 14.01% stake in Peterlabs Holdings Bhd want to oust seven board members.

The reasons being the seven directors have been drawing too high salaries and that the 10-member board is considered too big for the ACE Market-listed firm, said executive director Lau Kin Wai, who is also the board representative of Fatfish Venture Sdn Bhd.

Fatfish, which holds a 7.7% stake is one of the substantial shareholders which has served a notice to Peterlabs to requisite an EGM for the removal of seven directors, and appointment of three others as new directors and redesignation of one director.

Hoifutinhong Sdn Bhd is the other substantial shareholder holding a 4.06% stake.

Kin Wai claimed that the current board is not optimal due to three reasons. First, the board is too big for swift decision making and functioning effectively.

Secondly, a majority of its board members (70%) are above 60 years old. Thirdly, the directors are disproportionately rewarded with approximately 45% of the company’s net profit.

Peterlab’s director remuneration, including salary and bonus, amounted to RM1.73 million compared with annual net profit of RM4 million, according to its annual report for the financial year ended Dec 31, 2017.

“By shrinking the board and reappointing the directors, we could potentially enhance the bottom line. We need younger and talented people to bring the company to the next level,” Lau told The Edge Financial Daily.

“As an institutional shareholder, we are interested to enhance our investment value, there is something to improve the company, starting from the important component of the company — the board of directors,” said Kin Wai, adding that Peterlabs has not been able to unleash its full growth potential.

In a filling with Bursa Malaysia yesterday, the ACE Market-listed animal health and nutritional products maker said the directors whom the two shareholders want to remove are Lim Tong Seng, Datuk Hon Choon Kim, Dr Paul Cheng Chai Liou, Yap Siaw Peng, Lau Yeng Khuan, Dr Vijaya Raghavan A/L M P Nair and Azman Abdul Jalil.

Lim is the managing director and co-founder who is holding a 6.03% stake. The company’s largest shareholder is Teo Chin Heng, who is also the co-founder, with a 9.84% stake.

Meanwhile, they are proposing to appoint Chai Choon We, Goh Sim Geh and Cheoh Hor Jin to the board. There is also a proposal to redesignate Kin Wai as a sole managing director of the company.

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