Requisitioning shareholders of ecoWise say EGM postponed only because of injunction application

Singapore

THE 8 shareholders of ecoWise Holdings who have requisitioned an extraordinary general meeting (EGM) have taken issue with the company's statement issued on Wednesday (Mar 16).

In a letter addressed to ecoWise's board and sponsor and seen by The Business Times, the shareholders sought to clarify that a previously requisitioned EGM was not, as ecoWise claimed, "voluntarily postponed". The EGM did not take place earlier because of a temporary injunction obtained by ecoWise's director and deputy chief executive Cao Shixuan, they said.

The shareholders, who collectively own an 11.3 per cent stake in ecoWise, intend to convene an EGM on Apr 14 to remove Cao from all his roles within the company and its associates. They have also put up 3 new directors for appointment.

But they claim ecoWise's latest statement about the voluntary postponement of the previous EGM "diminishes the credibility of the upcoming EGM", and that a shareholder would take the upcoming EGM "less seriously".

In their letter, the shareholders also noted that there have been developments in litigations involving Cao, ecoWise and other directors of ecoWise, but that these developments have not been disclosed to shareholders.

The shareholders said they had been "contacted by our fellow shareholders", with questions about the voluntary withdrawal and why the shareholders had now changed their minds and were now trying to convene another EGM.

"To be clear, we did not change our mind - we commenced preparations to convene the upcoming EGM as soon as the temporary injunction lapsed," they said.

These 8 shareholders were part of a group of shareholders that had intended to convene an EGM on Nov 26 last year, also with the aim of removing Cao and appointing new directors.

On Nov 24, ecoWise announced that Cao had on Nov 12 applied for an injunction against the convening of this EGM application, and that, "given this application, the board is unable to give further information as to when or whether the EGM will take place".

The shareholders have clarified in response to questions from BT that in light of the pending court hearing, they did at the time choose to postpone the EGM to allow the court process to take place.

Cao's application was dismissed on Dec 3, 2021. He then appealed the decision, and asked for a temporary injunction while awaiting the results of this appeal. This temporary injunction was granted. But Cao has since withdrawn his appeal, the shareholders are now free to pursue the EGM once more.

The statement by ecoWise on Mar 16, informing shareholders about the requisitioning of the EGM, also highlighted 3 shortcomings of the shareholders' requisition notice.

One was that the notice of the EGM did not specify the "background and reasons" behind each of the proposed resolutions.

Responding to this, the shareholders said they did not believe this background was necessary. They noted that the shareholders of Rich Capital Holdings and Ntegrator International, for example, had also called for EGMs without offering reasons for each resolution.

Also, ecoWise said that required information about the new directors has not been given to shareholders.

But the requisitioning shareholders said this information was in fact provided in a link within the text of the EGM notice. They noted that the 3 proposed directors - Danny Oh Beng Teck, Gan Fong Jek and Tan Poh Chye Allan - are the same individuals proposed previously, and have also been interviewed by ecoWise's sponsor. "The relevant Catalist rules have been complied with," they said.

Finally, ecoWise noted that the given deadline for CPF and SRS investors to approach their CPF agent banks and SRS operators if they wish to exercise their vote is "inaccurate". The date given in the EGM notice is Apr 8, when it should have been 7 working days before the EGM.

The requisitioning shareholders said the date is indeed inaccurate, but that there was no breach of any law or regulation that would prohibit the EGM from being validly convened and held.

"The important rule is for shareholders' proxy forms to be submitted 72 hours prior, by Apr 11, 2022, 2.30 pm, and we have complied," they said.