Reenova executive and director quit 2 days after chairman dies, saying company is unable to function

A SENIOR executive and a director of Reenova Investment Holding have left the firm, saying they have done so because the company is “not able to run functionally”, according to bourse filings on Wednesday (Jun 15).

This follows the death of the company’s executive chairman and executive director Chen Tong on Saturday at age 57. He had taken up the roles in the company, previously known as ISR Capital, in October 2016, and was primarily involved in the oversight and management of the group’s investments and corporate developments; he also formulated its overall business and corporate policies and strategies, says the company’s website.

“With the passing of Mr Chen Tong, the executive chairman and the only executive director of the Company, the company remains under the leadership of independent directors,” said the company in a statement on Monday.

The website listed Lee Ka Shao and Lin Chen Hsin as the company’s only independent non-executive directors.

But on Tuesday, Lee, 52, resigned, saying he was unable to discharge his responsibilities as an independent director “because the company is not able to continue functioning as an entity”. Lee, who also chaired the audit committee, took up the role in January 2017.

Kwok Kai Ming, group financial controller and company secretary, was the next to submit his resignation, citing a similar reason. The 63-year-old was appointed to these roles only 2 months ago.

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Shortly after Reenova announced Chen’s death on Monday, the company also published a disclaimer of opinion issued by its independent auditor RT LLP. In the report, auditor Ravinthran Arumugam noted that the group incurred a loss of S$25.7 million in the 2021 financial year, recorded net operating cash outflows of S$1.7 million and net current liabilities of S$6.1 million.

As at last Dec 31, the company’s cash and cash equivalents stood at S$15,160, indicating that “a material uncertainty exists with a pervasive impact that may cast significant doubt on the Group’s ability to continue as a going concern”, Arumugam said.

Separately, the company said on Tuesday that it was terminating an amended and restated sale-and-purchase agreement in relation to the proposed acquisition of 3DOM Singapore, a subsidiary of Japanese battery maker 3DOM.

This is due to the “non-fulfilment of some conditions required for the final extension of time” granted by the Singapore Exchange Regulation (SGX RegCo) to Reenova. The grace period was to have been for the company to make a submission in relation to the proposed acquisition, and to resume trading of its shares no later than July 31.

The proposed acquisition, if successful, would have resulted in a reverse takeover of Reenova. The mainboard-listed company would have had to acquire 3DOM Singapore for 75-80 per cent of its valuation, which shall not be lower than US$1 billion, according to earlier exchange filings.

That was not the first time 3DOM Singapore has been party to a potential transaction that involves a reverse takeover.

3DOM is now hoping to list on the Nasdaq through a special-purpose acquisition company (SPAC), it said on a notice on its website.

Trading of Reenova shares has been suspended since Oct 20, 2020.