Medical property developer International Healthway Corp (IHC) appears to have stalled a request from unhappy shareholders to convene a hostile extraordinary general meeting (EGM) of shareholders.
It said in a statement close to midnight on Tuesday that the request was "invalid and legally ineffective", despite the shareholders - Oxley deputy chief Eric Low and his sister Audrey - providing bank verification of their holdings.
A puzzled Mr Low said yesterday: "I don't understand why they doubt my shareholdings. I have shares parked under nominee accounts but I got all the banks to give me letters of certification and I got notaries to verify they were genuine. You can't just say our request is invalid, you have to tell the full story."
IHC did not explain its reasoning in the public filing, but in response to questions from The Straits Times, executive director Lim Beng Choo said she had been advised that under Section 176 of the Companies Act, in order for a person's shareholding to count towards the 10 per cent representation required, his shares must be held in his own name and not in nominee accounts.
She added: "The amount held in their name is only 8,000-over shares."
While the rule requires those calling an EGM to be members of a company's share register, it makes no mention of nominees.
Companies can, however, lay down their own rules for how to count shares in their individual company constitutions. UniLegal consultant Yoong Nim Chor, who advised IHC, declined to comment.
One lawyer, who declined to be named, said he had not come across such a basis for rejecting a requisition before, and that IHC should announce its reasons since the decision was a material development concerning the company.
Another lawyer agreed that those seeking the meeting would have to go back to the drawing board. But he noted it would be an easy fix: "IHC is just delaying the inevitable. The nominee banks will usually play ball and sign the requisition letter and the game will be back in play quite soon."
Meanwhile, IHC is working without an auditor after 58 per cent of its shareholders voted against the appointment of Baker Tilly at a separate meeting yesterday.
Former auditor PwC chose not to be re-appointed owing to disagreements with the IHC board over how certain properties should be valued, among other things.
Independent director Leonard Chia, who chaired the meeting, said: "Since the shareholders have not agreed to Baker Tilly being the auditors, we will have to apply to the authorities for an extension of time to appoint another suitable firm of auditors."
Two other resolutions, to pass a general share issue mandate and approve up to $420,000 directors' fees for the current financial year also failed to pass yesterday with few questions asked.
IHC shares fell 2.9 per cent or 0.2 cent to close at 6.8 cents.