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Darco's deputy chairman to recuse himself from project
DARCO Water Technologies deputy chairman Robert Wang Zhi is "prepared to abide by the audit committee's recommendation" that he abstain from deliberations and decisions on a controversial Indonesian waste management project in which the water treatment firm has proposed to invest.
This statement was made to Darco's board through Mr Wang's legal counsel, Darco said in an announcement on the SGXNet on Thursday.
In its announcement, Darco also said that Mr Wang had first learned of the opportunity to take a 75 per cent stake in the Indonesian company Panghegar Energy Indonesia (PEI) through Steven Yee, the general manager of Yunnan Water.
PEI's 80 per cent-owned subsidiary Jabar Bersih Lestari has inked a cooperation agreement with the West Java government to provide waste management services in certain parts of the province.
The announcement did not specify which unit of Yunnan Water Mr Yee was employed with.
When Darco acquired its PEI stake for US$1.5 million, US$400,000 of this had been paid to Yunnan Water (Hong Kong) Co, a wholly-owned subsidiary of Hong Kong-listed Yunnan Water Investment Co. Darco had said this was because Yunnan Water (Hong Kong) had a share pledge over the PEI shares.
Mr Wang was previously a director of Yunnan Water International, also a unit of Yunnan Water Investment.
Shareholders had earlier raised doubts about the Indonesian project and asked that Mr Wang recuse himself from further discussions and decisions on the project since he is liable to fully reimburse Darco for any and all costs incurred in pursuing the acquisition if for any reason Darco cannot or decides not to proceed with it.
SGX had also requested Darco clarify connections between Mr Wang and the various parties linked to the PEI deal.
Mr Wang disclosed various past transactions with Yunnan Water entities. In April 2017, Yunnan Water had in acquired Pan Asia International (Sishui) Co. This company was 100 per cent owned by his wife, Zhang Hui.
Yunnan Water had also acquired the equity interest in Future International Group, the holding company of Future Water (Qingzhou). Sixty-five per cent of the equity interest was acquired in cash in December 2015 and the remaining 35 per cent of the equity interest was acquired in cash in February 2018.
The statement did not disclose the nature of his relationship with Future International Group, but Mr Wang is currently the chairman of Future International Investments, Future International Investment and Future Holdings Group.
In February 2018, Yunnan Water also conducted two further acquisitions in which Mr Wang had interests. However, he is “unable to disclose further details as a result of his contractual non-disclosure obligations,” the statement said.
Shares of Darco were flat at S$0.160 when markets closed on Thursday, before the company responded to SGX.