MC Payment controlling shareholder Ching says he lacks confidence in current board

THE controlling shareholder of MC Payment, Ching Chiat Kwong, is asking for the removal of all but one of the company's current directors because of a "loss of confidence in the current board".

In a letter on Thursday seen by The Business Times, Mr Ching, who is also the chief executive officer of mainboard-listed property group Oxley Holdings, said this was due to "recent discoveries" as well as the current board's "failure to pay due regard to my rights as a shareholder".

Although MC Payment's chairman Albert Cheok had welcomed him to the board, Mr Ching said Mr Cheok had also referred to him as a "cunning fox" in an email that Mr Ching believes was sent to him by mistake.

Mr Ching, who holds 27.06 per cent of MC Payment, has filed two requisition notices. The first, on May 4, calls for another five directors, including Mr Ching, to be appointed to the board.

The second, dated May 31, calls for the removal of all present MC Payment directors - including CEO Anthony Koh - except for independent director Kesavan Nair.

The boardroom tussle at MC Payment, a digital payments company, dates to the company's AGM on April 28 this year.

Two of the three directors up for re-election at the meeting were not re-elected: Harry Ng and Shawn Ching. The latter is Mr Ching's son and the former is lead independent director at Oxley.

Votes in favour of their re-election came to only 43.3 per cent of votes cast.

The resolution for Mr Nair's re-election, however, was passed with 85 per cent of votes.

Mr Ching has suspicions about how this came to be the case and has asked that the matter be investigated.

Furthermore, he said, a directors' resolution passed on April 30 - two days after the AGM - authorised MC Payment CEO Mr Koh to enter into a term sheet on behalf of the company for the proposed acquisition of shares in SGX-listed NGSC.

NGSC, which has been suspended from trading since Jan 3 last year, is an investment holding company whose subsidiaries provide satellite-based services and telecommunications solutions in China and Indonesia.

The term sheet was for the purchase of at least 51 per ent of NGSC at a purchase price valuing NGSC at S$9.6 million, and was to be satisfied by the issue of shares in MC Payment.

This would have meant a dilution of both Mr Ching and other shareholders' interests.

NGSC is on the SGX watch-list and was issued with a notice of delisting in December 2019. It recorded a net loss of S$27.1 million in its financial year ended March 31, 2021, compared with a net profit of S$20.2 million in the prior year.

Mr Ching, whose stake in MC Payment has come from providing financial support to the company over the years, was also concerned that the present board has not made enough of an effort to review the candidacy of the nominees in his requisition notice.

He said he has not sighted any records or minutes from the company's books to suggest that such a review has been carried out.

But he noted that MC Payment's board announced the appointment of a new director, David Ong, on May 27.

Mr Ching also said he had provided information in his requisition notices about the qualifications and suitability of the five proposed directors, and the reasons for his loss of confidence in the current board, but this information was not released to shareholders.

MC Payment was listed on Catalist in February this year following a reverse takeover of Artivision Technologies. Artivision had been a cash company since February 2018. Mr Ching had acquired a substantial stake in Artivision back in 2012, and had later supported it by disbursing unsecured loans. He had also provided an undertaking to fund the company's operations and pay its liabilities for at least another 12 months from April 6 this year.

MC Payment has scheduled a June 30 EGM for Mr Ching's first requisition notice. But the company said on Wednesday it will not move the second requisition notice at the same EGM in order to provide reasonable time for the current directors to make representations in writing to the company, as well as for shareholders to consider the same.

BT has reached out to MC Payment for comment.

MC Payment shares closed at S$0.335 on Friday, down 1.5 per cent or 0.5 Singapore cent.