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VibroPower founder hits back ahead of potential ouster
VIBROPOWER Corporation already supplies power generators to quarters in the real estate sector, and competition is intense and margins are thin, the company's founder Benedict Chen has said, firing back at claims by a shareholder looking to oust him.
The shareholder is Alex Chng who, together with his cousin Lim Eng Tiong, is looking to boot out all of VibroPower's three directors including Mr Chen, and appoint himself and two others to the board at an extraordinary general meeting (EGM) on Nov 9.
Mr Chng has claimed that he and his proposed board can do a better job, particularly by leveraging his experience and network in the real estate sector to sell more power generators to developers. His family business, PIP Marketing, has had a hand in several private property developments here, The Business Times reported on Oct 8.
But in a letter of representation on Friday, Mr Chen said that VibroPower "already supplies hotels, factories and condominiums with generators". He also noted that the market was "small", with "intense" competition and "thin" margins. The company's strategy is thus to supply power solutions instead, which provide "healthy margins".
In addition, Mr Chen pointed out that the company does not supply directly to developers. Instead, it deals with contractors engaged by end-users, such as government agencies.
Finally, he said, VibroPower has not received "any concrete plans" from Mr Chng as to how he will use his property development experience in the generators business.
Among the items to be voted on at the EGM is also the withdrawal of VibroPower's general share issue mandate, which Mr Chen also addressed in his letter.
Mr Chen currently holds about 18 per cent of the total issued shares of the company. His brother Chen Siew Meng has recently upped his direct and deemed interests in the company to a combined 6.613 per cent, from 5.947 per cent.
Mr Chng and his cousin collectively held almost nine million VibroPower shares representing 16.5 per cent of outstanding shares as at Sept 14, when they exercised their rights to requisition the EGM.