Darco shareholders reach 'amicable resolution' with ex-deputy chairman

DARCO Water Technologies' minority shareholders have reached an "amicable resolution" with former non-executive deputy chairman and controlling shareholder Wang Zhi regarding previous complaints made over various alleged wrongdoings. (see amendment note)

The resolution comes as the minority shareholders had failed in their bid to sue Wang and Pek Thiam Keong on behalf of the company, after the High Court on Sept 14 dismissed their application for leave to commence statutory derivative proceedings against the individuals.

The shareholders - Sofos Infrastructure Investment Fund and Alexander Robert Stone - previously alleged that Wang had applied undue influence over the board of directors and raised complaints about alleged conflicts of interests and gratuitous payments relating to services provided by Qarah Consultancy.

They also complained about the circumstances relating to Wang's alleged involvement in Darco's proposed placement exercise in 2020 and the proposed transfer of his interests in a 30-year concession or water treatment plant in China.

Other allegations include Wang's introduction of the Nambo waste management project in Bogor Regency and Depok City in Indonesia to Darco, the circumstances surrounding the mandatory conditional cash offer made by Wang on May 26, 2020, and his alleged involvement in the cessation of Tay Von Kian's non-executive independent directorship in Darco.

Sofos and Stone now recognise that Wang has at all material times sought to act in the best interests of Darco, and that Darco stands to benefit from his positive contributions in the future, said Darco in a statement on Monday (Dec 20).

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Shares of Darco closed flat at S$0.126 on Monday before the announcement.

Amendment note: An earlier version of this article stated Wang is the deputy chairman of Darco. He is the former deputy chairman. The article has been amended to reflect this change.