Decision to issue letter of demand against former CEO was reached by board collectively: Darco Water Technologies

THE decision to issue a letter of demand against its former chief executive officer was one reached by the board collectively, Darco Water Technologies clarified in a filing to the Singapore Exchange.

It highlighted that the claim against Thye Kim Meng was the result of a "comprehensive internal review of past transactions" entered into by the group. After the review, each board member, in consultation with the company's legal counsel, deliberated on the course of action. The decision to issue the Letter of Demand against Mr Thye was reached by the board collectively.

Darco added: "The board wishes to reiterate that given the potential litigation that may arise, the company is unable to comment on the merits of the claim against Mr Thye at this juncture. The company has been working closely with its legal advisers, and will continue to do so to pursue all avenues to protect its interests."

Last week, Mr Thye responded to Darco's allegations that he had breached his duties to the company in relation to a water and solar project in Vietnam.

Darco's allegations were in relation to the proposed acquisition of a solar power farm in Con Dao, Vietnam, and a 90 per cent interest in Can Guioc Water Works. The company said that Mr Thye's alleged breach of duties caused the company losses and damages of US$1.6 million, because these projects did not materialise.

In a letter to the board, Mr Thye said that the announcement of the letter of demand, together with earlier announcements filed to the Singapore Exchange, sought to "single (him) out" and "tarnish (his) reputation".

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Among other things, Mr Thye questioned the board whether the issuance of the letter of demand was an action taken by the management of the company, or the company under the instructions or influence of non-executive deputy chairman Wang Zhi. Mr Thye also challenged the company to seek its recourse in courts if it believes that it is entitled to seek damages and losses against him.

Shares of Darco last traded at S$0.16 on July 13.