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Datapulse shareholders grill board on potential haircut over Wayco sale
DATAPULSE Technology's annual shareholder meeting on Friday lasted well over three hours, but hardly bore the agita that was thick in the air at its special shareholder meeting seven months ago amid a bitter shareholder feud and controversial buyout of a haircare firm.
It may have helped that from the get-go, the mainboard listed company's chairman of less than three months, Aw Cheok Huat, set the tone with his sangfroid, perhaps well-honed by his experience as chairman of Catalist-listed ICP Holdings which he controls.
"One of the staff recalled that the past EGM was rather hostile and offered me four Panadols. I didn't think it would get that hostile, so I took only two," he joked, drawing laughs from the floor.
About 100 people were present at the AGM - half the turnout at April's EGM - but they clearly came prepared with a litany of questions, not least because of the back-to-back developments at the cash-rich firm with S$82 million in its kitty and on the prowl for a substantive business.
At the onset, a couple of shareholders stressed that the remarks made at the meeting were protected by "qualified privilege" as there was a note of caution following a recent case of a defamation suit against investor Mano Sabnani by Stamford Land Corp. Last month, both parties reached an "amicable settlement".
Datapulse's two most recent announcements hogged the event; an announcement late on Thursday that it was backing out of Wayco Manufacturing, a Malaysian-incorporated firm it had hastily bought out back in December 2017 for S$3.4 million.
Datapulse said it has inked a binding term sheet to sell Wayco for S$3.18 million, citing Wayco's not-so-rosy financials and the need for Datapulse to focus on its investment and property businesses.
The buyout was carried out by a newly-installed board back then following the entry of a new controlling shareholder Ng Siew Hong - she was present at the AGM - and was staunchly defended by that board as a "value chain play in the haircare market".
The directors who led the Wayco deal are no longer in Datapulse's board as they did not stand for re-election at the AGM.
In a separate disclosure, Datapulse said it has received a letter of demand from former directors Ng Cheow Chye, Ng Cheow Leng and Si Yok Fong for total claims of S$751,118 linked to an alleged profit-sharing arrangement with the firm.
"We discussed this matter at the last board meeting. We have our own personal views on whether they should be paid (or not). The computations (for profit sharing) can be complicated. The matter is now with our solicitors... let's wait for the lawyers to advise us," said Mr Aw, replying to a query on the matter.
More questions abounded on Datapulse's potential haircut on the Wayco sale.
"Let's not flog a dead horse. Let's move forward," said Mr Aw.
Professor Mak Yuen Teen of NUS Business School, a governance hawk and staunch critic of Datapulse, said: "We want to move forward, but I am also a strong believer in accountability.
"If the board wants to move forward, I would like to strongly urge the board to review whether there's any basis for legal action against any (past) directors."
Prof Mak was referring to the potential loss of some S$200,000 on the Wayco deal.
Mr Aw told shareholders: "The current board is not going to sweep things under the rug. We will look at if fiduciary duties have been breached, but we won't jump into legal action unless we have evidence.
"I will make sure money is properly utilised for business. There is always a cost benefit analysis and I am not going to throw good money over bad."
There were several shareholders who stood up to ask for the cash to be distributed back to them in dividend versus the one Singapore cent per share. "The company's track record is appalling... it doesn't warm our hearts. Return the cash to us," said one shareholder.
Mr Aw said: "My action is to do something for the sake of all shareholders. We (the board) spent hours discussing the dividend and decided we want the company to issue regular dividends, not just a one-off lump sum and then go to sleep."
One shareholder shouted: "We want you to delist the company," to which Mr Aw replied sternly: "No shouting please."
Mostly, however, cool heads prevailed throughout the meeting.
All nine resolutions at the AGM were passed including the dividend payout, payment of S$150,000 directors' fees and re-election of three directors including Mr Aw and two independent directors - Loo Cheng Guan and Sin Boon Ann.