Discussions with Ching were not to address 'underlying disagreement': MC Payment

MC Payment said on Friday that discussions between board members and controlling shareholder Ching Chiat Kwong between May 4 and May 25 were to address matters raised in Mr Ching's requisition to convene an extraordinary general meeting (EGM), and were "not carried out to address underlying disagreements".

The Catalist-listed digital payments company was responding to queries by Singapore Exchange Regulation (SGX RegCo). Among the queries was why MC Payment had said on May 11 that it was not aware of any disagreements among the board members or between the board and management or controlling shareholders of the company, even though the company had been holding discussions with Mr Ching to resolve matters relating to Mr Ching's requisition.

After two directors representing Mr Ching's interests on MC Payment's board - Mr Harry Ng and Mr Shawn Ching - were not re-elected at the company's annual general meeting (AGM) on April 28, Mr Ching had on May 4 asked MC Payment to convene an EGM to consider the appointment of five new directors.

Mr Ching, who is also the executive chairman and chief executive officer of property developer Oxley Holdings, owns 27.1 per cent of MC Payment. Mr Shawn Ching is his son.

SGX RegCo questioned why Mr Ng and Mr Ching were not deemed suitable for directorship even though they had previously been MC Payment directors and were also considered for re-election at the company's AGM on April 28.

MC Payment, in a circular released Thursday, had said that its board did not recommend the appointments of any of Mr Ching's proposed directors. MC Payment's sponsor, however, found them all suitable.

MC Payment said the views of its cominating committee were influenced by, among other things, reports of financial difficulties at Pindan Group, an Australian construction company wholly owned by Oxley Holdings. These had only recently come to light, the company said.

The evaluation report of the nominating committee was adopted by the board with the exception of Kesavan Nair, its independent director.

MC Payment's sponsor had said, however, that information related to Pindan reflected general business challenges and did not "cast doubt on the integrity and character" of the individuals involved.

SGX RegCo also raised questions regarding MC Payment's exploratory talks with NGSC, an investment holding company whose subsidiaries provide satellite-based services and telecommunications solutions in China and Indonesia.

SGX RegCo sought to clarify what documents were signed or arrangements made between the company and NGSC.

MC Payment had said on June 11, in response to SGX RegCo's queries, that no binding term sheets or agreements were signed. But the company later said a non-binding term sheet was explored, with certain binding provisions.

In response, MC Payment clarified that its talks with NGSC were held under a non-disclosure agreement in March this year.

There was, however, a "draft term sheet available to parties" with a few "standard form provisions" - such as confidentiality and expenses incurred - that were "expressed to be binding".

SGX RegCo also asked what the board considered in authorising Anthony Koh, chief executive officer of MC Payment, to engage in exploratory talks with NGSC.

In response, the board said it understood the discussions to be "exploratory and preliminary". Since the intended term sheet was not binding and only requested by NGSC to seek approvals for the transaction, the board did not further involve itself in the process.

Shares of Catalist-listed MC Payment closed at 41.5 Singapore cents on Friday, down 3.5 cents or about 7.8 per cent.