Reenova gets SGX RegCo compliance notice, required to seek approval for board changes 

SUSPENDED stock Reenova Investment Holding on Monday (Jun 20) was slapped with a compliance notice from bourse regulator Singapore Exchange Regulation (SGX RegCo), just days after an announcement that the company’s senior executive and director left as the company is “not able to run functionally”.

Following the departures of the duo – lead independent director Lee Ka Shao and group financial controller and company secretary Kwok Kai Ming – SGX RegCo noted that Reenova’s nominating committee will have only 2 members. 

The two resigned shortly after the death of the company’s executive chairman and executive director Chen Tong. Following his demise, Reenova is now under the leadership of its independent directors. 

SGX RegCo said following the departures, Reenova’s board now only has 2 independent non-executive directors – Lin Chen Hsin and Eddy Lim. 

Under the compliance notice, Reenova is required to seek the approval of the exchange for any changes in the composition of the board, including the cessation, appointment or reappointment of any director or executive officer. 

In addition, the company’s independent directors are required to report directly to SGX RegCo, and provide full information regarding the appointment of a liquidator or disposal of assets of the company.

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The independent directors are also required to provide full assistance for the purpose of updating the market and in relation to an exit offer in the event of any potential delisting of the company.

The bourse regulator said Reenova’s board should ensure that the company’s assets are properly safeguarded, particularly the rare earth mine in Madagascar and the collection of significant other receivables advanced to its joint-venture partners.

Reenova had terminated an amended and restated sale-and-purchase agreement in relation to the proposed acquisition of 3DOM Singapore, a subsidiary of Japanese battery maker 3DOM. 

If successful, the acquisition would have resulted in a reverse takeover of Reenova. The company would have had to acquire 3DOM Singapore for 75-80 per cent of its valuation, which shall not be lower than US$1 billion, according to exchange filings.

SGX RegCo warned that failure to comply with the requirements imposed will be deemed a contravention of listing rules.