Axington's board engaging Loh cousins on 'strategic changes', and appointing executives

Singapore

THE two-man board of Axington is engaging with controlling shareholders Nelson and Terence Loh to obtain clarity on "strategic changes" expected to be made in the business direction of the company, the Catalist-listed firm said in a bourse filing on Thursday.

In its response to queries from the Singapore Exchange (SGX), the company added that its board understands that the Loh cousins are continuing to "explore strategic possibilities with respect to the company". Pending further developments, the board will also continue to "assess all possibilities in the best interests of the company".

The Catalist-listed professional advisory services group had in July proposed to change its core business to that of providing medical and consumer wellness services, and investing in medical technology, robotics and artificial-intelligence technology applications in the medical and consumer-wellness space.

Subsequently, Axington requested a voluntary suspension of its shares on Sept 6, pending the release of an announcement in relation to the "strategic changes". On Thursday, it said trading in its shares would remain suspended before that announcement is made.

Meanwhile, after the recent resignation of five of its directors, the board now comprises only independent directors.

It will thus "endeavour to fill the vacancies" as soon as practicably possible, so that it would be in line with the requirements of the Code of Corporate Governance 2018 and the Catalist rules - including those regarding its audit committee, which is required to have at least three members.

In addition, the board is now identifying suitable candidates to be appointed to executive positions to oversee the company's day-to-day operations, and to implement the "strategic changes", Axington said on Thursday.

It is reviewing the expertise and experience of the candidates, and will make an announcement to update shareholders in due course.

The company's Singapore unit, Axington Singapore, formerly known as Axcelasia Singapore, remains its sole operating subsidiary.

The group ceased operations in Malaysia following the divestment of subsidiary Axcelasia Taxand in April. It is also striking off three more dormant subsidiaries - Axington Lao, Audex Governance and Axcelasia Vietnam.

The group's directors, including chairman Evangeline Shen, resigned last month after the Lohs and her company Bellagraph Nova Group admitted to doctoring photos with former US President Barack Obama. That had followed Bellagraph's announcement of its bid for English football club Newcastle United.

Ms Shen's resignation, which Axington said was due to the "strategic changes", came after SGX's regulatory arm said it had "engaged" Axington's sponsor over how it assessed her "experience, expertise, character and integrity".

Following the controversy, anxious local and regional investors had held discussions about pulling out millions of dollars invested in entities under the Lohs' Novena Global Healthcare Group.

On Thursday, Axington told SGX that its board "recognises the importance of maintaining a system of internal control processes to safeguard shareholders' interests and the group's business and assets".

The bourse operator had asked for an update on the safeguards put in place to ensure that the use and/or deployment of the group's assets are in its best interests, in consideration of the possible strategic changes to the group's business direction.

Axington replied that it has taken steps to have company documents handed over from the former executive team.

It has also been in contact with the bank where its cash balances are held, and begun the process of making changes to the authorised signatories of the company's bank accounts, Axington added.

Based on the unaudited financial statements for the half year ended June 30, 2020, the group had cash and cash equivalents of about RM79.1 million (S$26 million), representing 97.4 per cent of its total assets.

Axington's shares last traded at S$0.19 on Aug 25.