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TANGS may be one of Singapore's oldest retailers but unhappy shareholders of the chain's owner are not buying its business strategy.
They peppered CK Tang's management with questions at its annual general meeting yesterday over its repeated losses and possible plans to delist the company from the stock exchange.
They were also exasperated over a move to again open a Kuala Lumpur outlet last year, even though a previous foray there lost money.
Another complaint: losses at its outlet, Tangs VivoCity, which opened in 2006.
In protest, the 60 or so shareholders and proxies at the two-hour meeting at Raffles Town Club tried to vote down standard resolutions, such as an advance payment of directors' fees. But this failed as executive chairman Tang Wee Sung and his family hold a clear majority of shares.
The absence of the executive chairman, who suffers from poor health, did nothing to slow down the stream of shareholder gripes.
They are frustrated that CK Tang again notched up a loss - of $2.2 million for the year ended March 31.
Shareholder Toh Peng Ting who invested in the stock many years ago, has seen the share price nosedive from about $3 in the 1980s to just 75.5 cents yesterday.
'I have lost almost everything. Our company has been in the red all these years. It is unfair to shareholders as we have supported them so far.'
Established in 1932, Tangs' flagship store is in Orchard Road.
The financial year ended March 31, 2005 had marked the first time the company had turned a profit in 11 years. It was profitable the following year too and paid a dividend that year, the first time it had done so in 12 years.
But last year it returned to the red, and stayed there this year.
Mr Foo Tiang Sooi, CK Tang's chief executive, defended the business strategy, such as the re-entry into Kuala Lumpur: 'We saw the long-term prospects of Malaysia as a market. As a retailer, we cannot stand still.'
He added that the VivoCity and Malaysia outlets are, 'big format' department stores. This means 'they have a certain gestation period, which is longer than small boutiques and outlets'.
Privatisation was yet another hot topic. Executive chairman Tang owns about 81 per cent of CK Tang and has been buying more stock. If he hits 90 per cent, the shares could be suspended.
The most recent attempt to privatise CK Tang was in 2006 with an offer to buy publicly held shares at 65 cents apiece but this failed. Shareholder Toh is worried that a poor price will be offered in another bid and 'we will be like those in the en bloc sales, where you have to take it or leave it'.
Mr Foo told shareholders that 'a privatisation exercise is the decision of the major shareholder. As far as the board of directors is concerned, we have a fiduciary duty to shareholders, to look after the business of the company'.
The executive chairman had not raised the issue of another privatisation bid with the board.
Mr Foo told reporters later that CK Tang was operationally profitable. Only interest costs of about $4.3 million on its bank loans took it into the red in its most recent results.
Mr Foo added that the firm might look at selling new shares to shareholders as a way to cut its debt, and thereby reduce interest costs.
sushyan@sph.com.sg
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