AGV director in CAD probe unwilling to step down

AGV Group's nominating committee (NC) on Thursday said it has recommended that executive director (ED) Albert Ang step down, amid an investigation by the Commercial Affairs Department (CAD).

However, Mr Ang, who was arrested and placed on bail earlier this week, is not willing to do so at the moment and has asked for time to consider and seek counsel on the matter, the Catalist-listed provider of hot-dip galvanising services said in a regulatory filing.

On Wednesday, AGV noted that Mr Ang has not been formally charged in court, though the CAD has found "reasonable grounds" that he committed an offence, in the course of its probe into the offence of false trading and market-rigging transactions under the Securities and Futures Act (SFA).

Mr Ang has been placed on a leave of absence since Aug 7.

In response to queries by the Singapore bourse, AGV on Thursday said its NC has been reviewing Mr Ang's suitability to continue as a director of the firm, including speaking to him to ascertain what had happened.

The NC noted that while it accepts that Mr Ang has the "appropriate experience and expertise", he "appears to now be a subject matter of the CAD investigation".

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"However, the NC wishes to place on record that the ED has maintained his innocence and has consistently indicated to the NC and board that he is not in breach of any law, and has no explanation as to why the CAD would have reasonable grounds to believe that he has committed an offence," the company said.

AGV's NC added that it is not at liberty to comment as it is not in a position to investigate into such an offence, if any, and that it has "no way to ascertain the facts of the matter".

That said, the committee has decided to place "extra weightage" on CAD's stance and as a matter of prudence, is inclined to take the position that Mr Ang is "no longer fit and proper" to continue as its ED.

Separately, the Singapore Exchange (SGX) has requested AGV to provide details of continued financial support and the board's assessment of the group's ability to continue operating as a going concern, among other things.

This is given that the group recorded net liabilities of S$12.9 million, net current liabilities of S$3.3 million, a net loss of S$0.6 million and operating cash outflows of S$0.88 million for the half year ended March 31 this year, SGX noted.

In response, AGV said some of its institutional lenders have agreed to defer the group's principal repayment over a moratorium period of eight months, due to the impact of the Covid-19 pandemic.

Furthermore, the group's executive chairman, Damien Chua Wei Kee, has undertaken to offer financial support and has loaned about S$854,000 to the group on an interest-free basis as at July 31, AGV said.

Mr Chua owns a controlling stake in the JD group of companies. The JD group had a turnover of more than US$300 million in its last financial year and its paid-up capital exceeds US$10 million, AGV noted in its exchange filing on Thursday.

According to AGV's website, Mr Chua is the chief executive of JD Resources Sdn Bhd, a leading distributor for industrial zinc and other metal resources in the region. He is also the director of related companies of JD Resources in the region.

AGV's directors said they believe Mr Chua will be able to meet the group's cashflow needs, if called upon. The group intends to enter into a facility agreement for the chairman to provide a facility to cover its existing cash needs for the next 12 months.

In addition, AGV noted that the group recently concluded a rights issue that raised about S$5.1 million from shareholders. About S$6.7 million of debt was capitalised during the rights issue exercise after the management negotiated with creditors.

AGV's board is of the view that the group is able to continue as a going concern in light of its ability to "generate sufficient cash flows from its operations", and amid "continued financial support" from individual, corporate and institutional lenders, as well as vendors, which includes the chairman.

On the basis that it is able to continue operating as a going concern, AGV's board believes there is no requirement for it to request a suspension in the trading of its shares.

AGV shares were trading flat at 2.5 Singapore cents as at 10.02am on Thursday.