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DLF founder explains to SGX his decision to turf out entire board

THE founder of DLF Holdings turfed out all his directors at an annual meeting two weeks ago because he was dissatisfied with the performance of one executive director, he told the Singapore Exchange (SGX) on Wednesday.

Manfred Fan Chee Seng, who founded and owns 42 per cent of Catalist-listed engineering firm DLF Holdings, was asked by the SGX to explain how he came to be the last man standing on the board.

He explained that he and other shareholders have decided to "restructure the entire board" because they were not satisfied with the performance of executive director and chief executive Wong Ming Kwong.

Mr Fan, who is also executive chairman of DLF, blamed the former CEO for the company's poor results. DLF reported a loss of S$1.24 million last year, versus a profit of S$3.37 million in 2017.

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Mr Wong, who still owns 45 million shares or 37 per cent of DLF, was forced to step down after the annual meeting on Apr 30. Only 46.7 million shares were voted in favour of his reappointment, whereas 60.6 million shares or 56.5 per cent of all votes were cast against his re-election.

Independent directors Wu Chiaw Ching, Yong Siak Hoong and Yip Shee Yin faced the same fate.

Mr Fan, however, was re-elected with a 100 per cent mandate.

No questions were raised by shareholders at the annual meeting, Mr Fan said. DLF had all of 117 shareholders as at March 22. It was listed via an initial public offering (IPO) by way of placement in July last year.

When asked by the SGX how the board will function with him as sole director remaining, Mr Fan said that he has identified three new independent directors that he plans to appoint. Sponsor PrimePartners Corporate Finance will conduct due diligence on these proposed candidates, he added.

Mr Fan will also take over the role of CEO himself.

"Mr Fan has more than 30 years of experience in the engineering and related industries and has been instrumental in the development of the group's business over the years since incorporation and is responsible for the overall management and operations of the business of the group," DLF said.

Mr Fan has also been involved in the daily operations of DLF since its IPO, it added. "Mr Fan has confirmed that the operations of the group's business are not expected to be materially affected with the departure of Mr Wong."

Neither will Mr Wong's departure result in any breach of the banking covenants by the group, Mr Fan confirmed.

DLF's existing bank facilities were secured by land and a personal guarantee provided by Mr Fan. The loan covenants did not make reference to Mr Wong's directorship or management role in the company or his shareholdings, it said.

DLF shares last changed hands on Tuesday at S$0.19.