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Hoe Leong: Re-appointment of Joseph Liew is in company's and shareholders' interests due to ongoing restructuring
THE board of Hoe Leong Corporation on Saturday clarified that the re-appointment of Liew Yoke Pheng, Joseph as executive director on June 26 was “in the interest of the company and shareholders”, given that the company is currently undergoing a restructuring process.
Mr Liew was nominated by the company’s financial creditors to be appointed as chief executive office in October 2019 and board chairman in November 2019 for the purpose of managing the financial and corporate restructuring of the group.
On June 26, he was re-appointed as an executive director - just two days after his re-election was voted down at the company’s annual general meeting. This was after taking into account the submission of two proxy forms supporting his re-election from two substantial shareholders - United Overseas Bank (UOB) and DBS - which had arrived past the submission deadline on June 23.
UOB and DBS became the biggest shareholders in the heavy equipment trader - with a direct interest of 28.66 per cent and 16.32 per cent respectively - following a debt-for-equity swap as part of the restructuring.
On Saturday, the board said: “As this restructuring exercise is still ongoing, the board believes that the continued support of the company’s financial creditors is dependent on Mr Liew continuing in his role as chairman and CEO of the company. Accordingly, the board is of the view that the re-appointment of Mr Liew as (executive director) on 26 June 2020 is in the interest of the company and shareholders.”
The Business Times understands that the financial creditors wield some say in the decision, given their power to foreclose the company if they do not have confidence in the company’s management team.
BT also understands that the company will hold an extraordinary general meeting where shareholders can ratify Mr Liew’s re-appointment.