MC Payment board issue is one of governance, says controlling shareholder Ching Chiat Kwong

Singapore

MC PAYMENT controlling shareholder Ching Chiat Kwong on Friday said the digital payments service's board issue is one of governance and is separate from the company's daily operations, amid a war of words this month.

This is in response to the letter from MC Payment board's to shareholders saying it wants to be able to go back to doing the "business of business" as soon as possible.

In his second statement released on Friday, Mr Ching claimed the board is using the existing management's contributions to the company's business as a reason for opposing his requests for a board refresh.

Doing so "conflates" the roles of the executive and board, he added.

"The executive and the board play different roles precisely to ensure that there is good corporate governance," Mr Ching said, adding it was "imperative" for the five additional directors to be appointed to the board to serve as a check and balance against the current board.

In his latest statement, Mr Ching also disagreed with MC Payment's claim that his loss of confidence "stemmed solely from a personal unhappiness" about Shawn Ching and Harry Ng not being re-elected at the company's annual general meeting (AGM) on April 28.

Mr Shawn Ching is his son, while Mr Ng is lead independent director of Oxley Holdings - where Mr Ching Chiat Kwong is chairman and chief executive.

Mr Ching Chiat Kwong has claimed that MC Payment CEO Anthony Koh was initially one of the three directors - the other two being Mr Ng and Kesavan Nair - to stand for re-election at the AGM.

But Mr Shawn Ching took Mr Koh's place as Mr Koh had said he was "not confident that the shareholders would re-elect him".

"After Mr Shawn Ching agreed to take Mr Anthony Koh's place at the re-election at the AGM, Mr Anthony Koh proceeded to vote against Mr Shawn Ching's re-election (as well as Mr Harry Ng's)," the statement said.

Mr Ching is looking to add five directors to MC Payment's board, including himself. Resolutions for this will be put to a vote at an extraordinary general meeting (EGM) on June 30.

Mr Ching is also proposing to remove all board directors except for one. Resolutions for this will be deferred to another EGM, the company said.

Mr Ching's latest statement also sought to provide more information about the directors he has proposed for election to MC Payment's board.

For instance, Mr Ching said one of them, Tan Chee Keong, is currently the head of payments consulting at American Express International.

MC Payment said in its EGM circular on Wednesday that Mr Ching's first requisition notice "sought to give the impression that the company has performed poorly" and that "without his financial support, the company would not be able to continue".

The company disputed this by saying that the company's reverse takeover (RTO) of Artivision Technologies benefited Mr Ching.

With the injection of MC Payments into Artivision, the loans he extended to Artivision could be repaid. Through the RTO and related agreements, Mr Ching had also negotiated terms that netted a pay-out worth of S$21.9 million as at June 11, the company said.

MC Payment saw its shares surge 51.5 per cent or S$0.17 to close at S$0.50 on Friday after the company said it received a letter of intent from Indonesia-based payments and remittance company Dompet Harapan Bangsa (OY!).

The latter is looking to take a strategic equity stake in the former, MC Payment said in a separate bourse filing.

OY! indicated that it intends to move towards a formal term sheet or memorandum of understanding agreement at the "soonest".

However, MC Payment noted that the letter of intent does not constitute any legally binding obligations on either party.

OY! first started in 2017 as a chat app, before developing a payments system the following year. Some of its key investors include Softbank Ventures Asia, AC Ventures, Metra Digital Investama, Wavemaker, and Temasek's Pavilion Capital.

It is planning to work with MC Payment's associate MCP Indo Utama in the initial stage to establish a stronger foothold in Indonesia.

Afterwards, it will leverage MC Payment's regional network to pursue expansion and collaboration opportunities.