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Magnus Energy's proposed board member shares plans for trading resumption
IF the new board proposed by Magnus Energy has its way, the future of the Catalist-listed company remains unchanged - an investment firm, with interest in the oil and gas sector.
Magnus is an investment holding company which derives nearly 70 per cent of its revenue from its 55 per cent stake in Mid-Continent Equipment Inc, an oil and and gas equipment distribution business in the US.
Its shares have been suspended from trading since Aug 23 following the release of an external report by Provenance Capital which was hired by the firm to review selected transactions from 2013 to 2017, following queries by its former executive managing director, Charles Madhavan. The latter was one of the two activist shareholders instrumental in ousting Magnus's chairman, two directors and independent auditor.
In an interview on Thursday, See Soon Hong said, if appointed, the priority for his team of directors which boasts of a qualified auditor, banker, lawyer and himself, a businessman, will be to facilitate the resumption in the trading of the shares.
In order to do this, the team will seek to address issues highlighted in the Provenance report which has "identified various weaknesses and shortfalls pertaining to each of these selected transactions".
"We will also appoint a lawyer for legal opinion to address issues of misconduct," said Mr See, who was introduced by independent director and the audit committee chairman, Lee Chong Ping, who was appointed by Magnus on Nov 22.
"We will get an internal auditor to advise on risks, review past transactions and come out with good corporate governance control at board and management level,'' he said.
But, most importantly, is the need to create some recurring income and get the shares trading again. To achieve that, the proposed board will assess Magnus's businesses to see which to get rid of, which to keep, and investment opportunities.
"We are looking at recurring income to save the company and get out of suspension. Recurring income is a priority for listed companies,'' he said, adding that the whole process could take 6-12 months to complete.
"If really there is no good asset target on hand, we will return cash to shareholders,'' he said.
Expert advice will be sought for Magnus's micro-algae project.
"If it can work, we are happy to reinvest in this,'' he said, adding that he is open to either a joint venture to create other forms of business from the land and equipment.
"Or even takeover and recover the funds,'' he shared.
Magnus has put Mr Lee up for re-election and proposed to appoint Mr See, Wong Ann Chai and Lam Kuet Keng as new directors who will make up the new board. The new directors are not taking any fees, unlike the rival team of directors proposed by Mr Madhavan, which is seeking S$90,000 in directors' fees for FY2020.
The EGM will be held on Jan 9.