Oei Hong Leong serves notice to remove Chew Hua Seng as Raffles Education chairman

SINGAPORE - Tycoon Oei Hong Leong, who has amassed a stake of more than 10 per cent in Raffles Education, wants a shareholders' meeting to remove chairman Chew Hua Seng.

In a letter to the board of directors, Mr Oei proposed that Mr Chew, who is also the firm's founder and chief executive, be replaced by an independent director and his employment terminated.

If none of the independent directors wish to take the position, Mr Oei is proposing that the board search for a suitable replacement to assume the role of non-executive chairman.

Mr Chew is the company's largest shareholder with a 33.58 per cent stake, down from 36.88 per cent before the placement.

Mr Oei also wants Raffles Education to disclose the identities and the number of shares placed to each of the people who received stock in the company's recent placement exercise.

The letter furnished no details of what prompted the action, but Mr Oei is a long-time shareholder in Raffles Education, having bought its shares seven years ago and raising his holdings every now and then.

Last month, he scooped up more shares in a series of market purchases that revived speculative interest in the counter, giving the shares price a boost. Mr Oei brought his stake up to 14.04 per cent. This was diluted to 12.88 per cent after the placement.

On Sept 28, after the company's shares reached a 12-month high of 33.5 cents on Sept 26, Raffles Education announced that it would place out 95 million new shares to raise net proceeds of $28.2 million to be used to repay loans and borrowings, and for working capital purposes.

The 95 million shares - representing 8.96 per cent of the company's enlarged share capital - were issued and allotted on Tuesday at an issue price of 30 cents each.

The company is holding its annual general meeting (AGM) on Oct 13 at Novotel Singapore Clarke Quay.

Raffles Education made a net loss of $1.85 million in the 12 months to June 30, down from a net profit of $15.8 million a year ago.

The discontinuation and teach-out of Raffles Shanghai joint venture college resulted in the turnover decline of revenue by $5.8 million, while the reduction in foreign student intake in Raffles Sydney dragged revenue down by $1.5 million from a year ago.

At last year's AGM, shareholders voiced concerns over how the company intended to start making real earnings from education.

Mr Chew said then: "We're trying to focus and expand at the expense of bringing in revenue."

Lead independent director Henry Tan added: "There's nothing to be proud of in terms of current performance and share price, but its not as if we've just been sitting there."

Raffles Education shares finished half a cent or 1.59 per cent higher at 32 cents today.