Sias seeks clarifications from Advanced Holdings after capital reduction exercise fails

INVESTORS’ watchdog Securities Investors Association (Singapore), or Sias, on Tuesday (Oct 3) raised questions over why engineering firm Advanced Holdings’ : BLZ 0% capital reduction exercise appears to have failed.

In an Aug 23 announcement signed by Advanced Holdings’ managing director (MD) Wong Kar King, the company said it is proposing to undertake a capital reduction exercise to write off accumulated losses of the company amounting to S$15.18 million as at Dec 31, 2022. It also proposed to return to shareholders the company’s surplus capital through a cash distribution of approximately 23.2 Singapore cents for each ordinary share.

However, the proposal did not succeed at the extraordinary general meeting (EGM) held on Sep 29 – an outcome that David Gerald, founder, president and chief executive of Sias, said came as a “shock” to shareholders.

Only 18.99 per cent of the votes were for the proposal.

“What has mystified shareholders is that the number of shares that voted against the proposal was 41,405,109 – almost the exact number held by Dr Wong, which was 41,402,109 as disclosed on page 13 of the Sep 7 letter to shareholders,” said Gerald.

“In other words, it appears to observers that your managing director initially proposed the capital reduction exercise, then changed his mind and voted against it,” he added.

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Gerald said Sias is hoping to clarify the situation on behalf of the company’s minority shareholders.

It is asking who proposed the capital reduction, and whether there was unanimous support within the ranks of the board and senior management, including Dr Wong.

It also asked about the nature of the working relationship between Dr Wong and the board, and if the board could provide shareholders an assessment of Dr Wong’s performance.

“A shareholder who attended the EGM has reported that the MD left in the middle of the meeting, and the chairman told those present that the reason for the MD’s departure was that ‘he was not feeling well’,” Gerald said.

Sias is asking if there are plans to conduct a special audit on the events surrounding the EGM and the apparent change of heart by the MD.

With the proposal having failed, Sias is also questioning how the company plans to accomplish its objectives.

Shares of Advanced Holdings closed at S$0.148 on Tuesday, up S$0.008 or 5.7 per cent from the day before.